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PREET BHARARA enUni t ed S t a t e s At to rney f o r t h e { ~S o u t h e rn D i s t r i c t of New YorkBy: JASON H. COWLEY

DANIEL W. LEVYDAVID B. MASSEY

A s s i s t a n t Uni t ed S t a t e s At to rneysOne S t . Andrew's PlazaNew York, New York 10007

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA,

P l a i n t i f f ,

- v . -

ALL FUNDS ON DEPOSIT AT UBS AG ,ACCOUNT NO. 101-WA-358967-000,HELD IN THE NAME OF WEGELIN & CO.,

Defendants i n r e m .

- x

- - - - - - - - x

~ ( ' J-p V ."1 .. \ ,, ,\ 1 '. l

12 Civ.

VERIFIED COMPLAINT

P l a i n t i f f Uni t e d S t a t e s o f America , by i t s a t t o r n e y ,

PREET BHARARA, Uni t ed S t a t e s At to rney f o r t h e Sou the rn D i s t r i c t

o f New York, f o r i t s Ve r i f i e d Complaint a l l e g e s , upon i n f o r m a t i o n

and b e l i e f , as fo l l ows :

I . NATURE OF THE ACTION

1 . T h i s an a c t i o n by t h e Uni ted S t a t e s o f America

seek ing f o r f e i t u r e o f a l l funds , app rox ima te l y $16 .2 m i l l i o n , on

d e p o s i t a t UBS AG, Account No. 101-WA-358967-000, h e l d i n t h e

name o f Wegel in & Co. ( the "Defendan t F u n d s " ) . The D e f e n d a n t

Funds a r e s u b j e c t t o f o r f e i t u r e p u r s u a n t t o 18 U.S.C.

981(a) (1) (A), as p r o p e r ~ yi nvo lved i n t r a n s a c t i o n s i n v i o l a t i o n

o f 18 U.S .C . 1956.


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2 . The I n t e r n a l Revenue S e r v i c e , C r i m i n a l

I n v e s t i g a t i o n (" IRS-CI") has conduc ted an i n v e s t i g a t i o n r e g a r d i n g

a c o n s p i r a c y among Wegel in & Co . ( "Wege l in" ) , more t h a n 100 U.S.

t a x p a y e r - c l i e n t s o f Wege l in , and o t h e r s known and unknown t o

d e f r a u d t h e u n i t e d S t a t e s o f c e r t a i n t a x e s due and owing, among

o t h e r t h i n g s , c o n c e a l i n g from t h e I n t e r n a l Revenue S e r v i c e

(" IRS") u n d e c l a r e d a c c o u n t s owned by u . S . t a x p a y e r s a t Wege l in

and o t h e r Swiss b a n k s . As s e t f o r t h be low, i t was p a r t o f t h i s

scheme t o p r o v i d e u . S . t a x p a y e r - c l i e n t s o f Wegel in and o t h e r

Swiss bankswho

h ad u n d e c l a r e d a c c o u n t s i n S w i t z e r l a n d a c c e s s t o

t h e i r u n d e c l a r e d funds i n t h e U n i t e d S t a t e s i n a manner t h a t

o b s c u r e d t h e s o u r c e o f t h e s e funds , t h a t i s , t h e u . S . t a x p a y e r

c l i e n t s ' u n d e c l a r e d a c c o u n t s i n S w i t z e r l a n d . To promote an d

f u r t h e r t h i s scheme t o d e f r a u d , Wege l in and o t h e r Swiss banks

u s e d We g e l i n ' s c o r r e s p o n d e n t bank a c c o u n t i n t h e U n i t e d S t a t e s t o

l a u n d e r u n d e c l a r e d funds from S w i t z e r l a n d t o U.S. t a x p a y e r

c l i e n t s i n a manner t h a t f a c i l i t a t e d t h e c o n t i n u e d concea lmen t o f

t h e s e u n d e c l a r e d a c c o u n t s from t h e IRS. The h i g h volume o f o t h e r

t r a n s a c t i o n s and o t h e r funds moving i n and o u t o f We g e l i n ' s

c o r r e s p o n d e n t a c c o u n t con temporaneous ly w i t h t h e l a u n d e r i n g o f

t h e s e u n d e c l a r e d a s s e t s h e l p e d t o f a c i l i t a t e t h e s e money

l a u n d e r i n g t r a n s a c t i o n s b y making t h e i r t r u e n a t u r e more

d i f f i c u l t t o d e t e c t and t o l e n d t h e s e t r a n s a c t i o n s an a u r a o f

l e g i t i m a c y.

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I I . JURISDICTION AND VENUE

3 . This C o u r t has j u r i s d i c t i o n p u r s u a n t t o 28 U.S .C .

1345 and 1355.

4. Venue i s p r o p e r p u r s u a n t t o 28 U.S.C.

1355(b) (1 ) (A) b e c a u s e a c t s and o m i s s i o n s g i v i n g r i s e t o t h e

f o r f e i t u r e t ook p l a c e i n t h e S o u t h e r n D i s t r i c t o f New York.

I I I . PROBABLE CAUSE FOR FORFEITURE

Background

Wege l in Bank and I t s C o - C o n s p i r a t o r s

5. At a l l t imes r e l e v a n t t o t h i s Compla in t , Wegel in

wa s a Swiss p r i v a t e bank w i t h o f f i c e s o n l y i n S w i t z e r l a n d . I t s

h e a d q u a r t e r s were l o c a t e d i n t h e c i t y o f S t . G a l l e n . Wege l in

p r o v i d e d p r i v a t e bank ing , a s s e t management , and o t h e r s e r v i c e s t o

i n d i v i d u a l s and e n t i t i e s a round t h e wor ld , i n c l u d i n g U.S.

t a x p a y e r s i n t h e Southe rn D i s t r i c t o f New York. Wege l in p r o v i d e d

t h e s e s e r v i c e s t h rough " c l i e n t a d v i s o r s " b a s e d i n i t s v a r i o u s

b r a n c h e s i n S w i t z e r l a n d ( " C l i e n t A d v i s o r s " ) . Wege l in wa s

p r i n c i p a l l y owned by a s m a l l group o f managing p a r t n e r s

("Managing P a r t n e r s " ) and was governed by an e x e c u t i v e commi t t ee

t h a t i n c l u d e d t h e Managing P a r t n e r s ( the " E x e c u t i v e Committee")

Wege l in d i d n o t m a i n t a i n an o f f i c e o r b r a n c h i n t h e U n i t e d

S t a t e s , b u t i t d i r e c t l y a c c e s s e d t h e U.S. bank ing sys t em t h rough

a c o r r e s p o n d e n t bank a c c o u n t , Account No . 101-WA-358967-000, h e l d

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a t UBS AG ("UBS") i n Stamford , Connec t i cu t ( the "S tamford

C o r r e s p o n d e n t Account") .

6. From a t l e a s t i n o r a b o u t 2008 up t h r o u g h and

i n c l u d i n g a t l e a s t i n o r a b o u t 2010, Michae l B e r l i n k a

( " B e r l i n k a " ) worked a s a C l i e n t A d v i s o r a t We g e l i n ' s Zur ich

b r a n c h ( t h e " Z u r i c h Branch") .

7. From a t l e a s t i n o r a b o u t 2006 up t h rough and

i n c l u d i n g i n o r a b o u t 2010, Urs F r e i ( " F r e i " ) worked a s a C l i e n t

Adviso r a t We g e l i n ' s Z u r i c h Branch .

8. From a t l e a s t i n o r a b o u t 2007 up t h rough and

i n c l u d i n g i n o r a b o u t 2010, Roger K e l l e r ( " K e l l e r " ) , worked a s a

C l i e n t A d v i s o r a t We g e l i n ' s Z u r i c h Branch. When K e l l e r wa s o u t

o f t h e o f f i c e and c o u l d n o t communicate w i t h , o r p r o v i d e s e r v i c e s

t o h i s u.s . t a x p a y e r - c l i e n t s , F r e i s e r v e d a s h i s backup , and v i c e

v e r s a .

9 . On o r a b o u t J a n u a r y 3 , 2012, K e l l e r , F r e i , and

B e r l i n k a were i n d i c t e d by a f e d e r a l g r a n d j u r y i n t h e S o u t h e r n

D i s t r i c t o f New York f o r c o n s p i r i n g t o d e f r a u d t h e U n i t e d S t a t e s

o f America and an agency t h e r e o f , t h e IRS, and t o commit o f f e n s e s

a g a i n s t t h e U n i t e d S t a t e s , t o w i t , v i o l a t i o n s o f T i t l e 26, U n i t e d

S t a t e s Code, S e c t i o n s 7206(1) and 7201. See U n i t e d S t a t e s v .

B e r l i n k a , e t a l . , 12 Cr. 2 (JSR) ( a t t a c h e d h e r e t o a s E x h i b i t A

and i n c o r p o r a t e d by r e f e r e n c e h e r e i n ) .

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10 . From i n o r a b o u t 2005 up t h rough and i n c l u d i n g i n

o r a b o u t 2010, C l i e n t A d v i s o r A, a c o - c o n s p i r a t o r , worked a s a

C l i e n t A d v i s o r a t th e Z u r i c h Branch . At v a r i o u s t i m e s , C l i e n t

A d v i s o r A a l s o s e r v e d a s t h e " team l e a d e r " o f B e r l i n k a , F r e i , and

K e l l e r , and o t h e r C l i e n t Adviso r s o f t h e Z u r i c h Branch . As a

team l e a d e r , C l i e n t Adviso r A c o o r d i n a t e d c e r t a i n a c t i v i t i e s o f ,

b u t d i d n o t s u p e r v i s e , t h e s e and o t h e r C l i e n t A d v i s o r s .

1 1 . From i n o r a b o u t 2007 up t h r o u g h and i n c l u d i n g i n

o r a b o u t 2011, Managing P a r t n e r A, a c o - c o n s p i r a t o r , wa s one o f

t h e Managing P a r t n e r s o f Wege l in . From i n o r a b o u t 2005 up

t h r o u g h and i n c l u d i n g i n o r a b o u t 2011, Managing P a r t n e r A wa s

t h e head o f We g e l i n ' s Z u r i c h Branch . Dur ing t h a t p e r i o d ,

Managing P a r t n e r A s u p e r v i s e d B e r l i n k a , F r e i , and K e l l e r , C l i e n t

A d v i s o r A, and o t h e r C l i e n t A d v i s o r s i n t h e Z u r i c h Branch w i t h

r e s p e c t t o , among o t h e r t h i n g s , t h e open ing and s e r v i c i n g o f

" u n d e c l a r e d a c c o u n t s " f o r U.S. t a x p a y e r s . Undec la red a c c o u n t s

a r e bank and s e c u r i t i e s a c c o u n t s f o r U.S. t a x p a y e r s i n which t h e

a s s e t s , and t h e income g e n e r a t e d i n them, were n o t r e p o r t e d by

t h e U.S. t a x p a y e r s t o t h e t a x a t i o n a u t h o r i t y o f t h e U n i t e d

S t a t e s , t h e IRS.

12 . From i n o r a b o u t 2008 up t h rough and i n c l u d i n g i n

o r a b o u t 2012, E x e c u t i v e A, a c o - c o n s p i r a t o r , wa s a member o f t h e

E x e c u t i v e Committee o f Wege l in . At a l l t imes r e l e v a n t t o t h i s

Compla in t , E x e c u t i v e A worked p r i m a r i l y a t t h e Z u r i c h Branch .

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1 3 . At a l l t i m e s r e l e v a n t t o t h i s Compla in t , Beda

S i n g e n b e r g e r ( " S i n g e n b e rg e r " ) , a c o - c o n s p i r a t o r , owned, o p e r a t e d ,

an d c o n t r o l l e d an i n v e s t m e n t a d v i s o r y b u s i n e s s b a s e d i n Z u r i c h

c a l l e d S i n c o Treuhand AG ( "S inco T r u s t " ) . B e g i n n i n g a t l e a s t i n

o r a b o u t 2000, S i n g e n b e rg e r, t h r o u g h Sinco T r u s t , s e r v e d a s an

i n d e p e n d e n t a s s e t manager f o r v a r i o u s u.s. t a x p a y e r s wh o h e l d

u n d e c l a r e d a c c o u n t s a t Wege l in , UBS, and o t h e r Swiss b a n k s .

S i n g e n b e rg e r h e l p e d U.S. t a x p a y e r s h i d e s u c h a c c o u n t s , and t h e

income g e n e r a t e d t h e r e i n , by , among o t h e r t h i n g s , c r e a t i n g sham

c o r p o r a t i o n s and f o u n d a t i o n s f o r U.S. t a x p a y e r s a s v e h i c l e s

t h r o u g h which t h e U.S . t a x p a y e r s c o u l d h o l d t h e i r u n d e c l a r e d

a c c o u n t s a t UBS, Wegel in , and o t h e r Swiss p r i v a t e b a n k s , and by

s e r v i n g a s t h e a s s e t manager f o r U.S. t a x p a y e r s who h e l d

u n d e c l a r e d a c c o u n t s a t t h e s e b a n k s . From a t l e a s t i n o r a b o u t

2002 t o i n o r a b o u t 2006, S i n g e n b e r g e r r e g u l a r l y t r a v e l e d t o t h e

S o u t h e r n D i s t r i c t o f New York and o t h e r p l a c e s i n t h e U n i t e d

S t a t e s t o mee t w i t h h i s U.S. t a x p a y e r - c l i e n t s w i t h u n d e c l a r e d

a c c o u n t s a t UBS, Wegel in , and o t h e r Swiss p r i v a t e b a n k s .

14 . From i n o r a b o u t t h e m i d - 1 9 9 0 s up t h r o u g h and

i n c l u d i n g i n o r a b o u t l a t e 2008, Gian G i s l e r ( " G i s l e r " ) , a

c o - c o n s p i r a t o r , worked a s a c l i e n t a d v i s o r a t UBS i n S w i t z e r l a n d .

From i n o r a b o u t e a r l y 2009 up t h r o u g h and i n c l u d i n g i n o r a b o u t

m id t o l a t e 2009, G i s l e r s e r v e d a s an i n d e p e n d e n t a s s e t manager

a t a Swiss a s s e t management f i rm ( "Swis s A s s e t Manager A" ) f o r

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o t h e r f i n a n c i a l account- , II and i f so , t h e u. s. t a x p a y e r was

r e q u i r e d t o name t h e c o u n t r y.

17 . I n a d d i t i o n , u.s. t a x p a y e r s who had a f i n a n c i a l

i n t e r e s t i n , o r s i g n a t u r e o r o t h e r a u t h o r i t y ove r a f o r e i g n bank

a c c o u n t w i t h a n agg rega t e v a l u e o f more t h a n $10,000 a t any t ime

d u r i n g a p a r t i c u l a r c a l e n d a r y e a r were r e q u i r e d t o f i l e w i t h t h e

IR S a Repor t o f Fo re ign Bank and F i n a n c i a l Accounts , Form TD F

9 0 - 2 2 . 1 ("FBAR") on o r b e f o r e June 30 o f t h e f o l l o w i n g y e a r . I n

g e n e r a l , t h e FBAR r e q u i r e d t h a t t h e u.s. t a x p a y e r f i l i n g t h e form

i d e n t i f y t h e f i n a n c i a l i n s t i t u t i o n wi th which t h e f i n a n c i a l

a c c o u n t wa s h e l d , t h e t y pe o f a c c o u n t ( e i t h e r bank, s e c u r i t i e s ,

o r o t h e r ) , t h e a c c o u n t number, and t h e maximum v a l u e o f t h e

a c c o u n t d u r i n g t h e c a l e n d a r y e a r f o r which t h e FBAR was be i ng

f i l e d .

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Th e Nature and Risks o f Correspondent Bankingand We g e l i n ' s Correspondent Account a t UBS

18 . As r e p o r t e d i n a 2001 i n v e s t i g a t i v e r e p o r t

p u b l i s h e d by t h e M i n o r i t y S t a f f o f t h e S e n a t e Permanen t

Subcommit tee on I n v e s t i g a t i o n s e n t i t l e d C o r r e s p o n d e n t Bank ing : A

Gateway F or Money Launder ing :

C o r r e s p o n d e n t b a n k i n g i s t h e p r o v l s i o n o f bank ings e r v i c e s by one bank t o a n o t h e r bank . I t i s al u c r a t i v e and i m p o r t a n t segmen t o f t h e b a n k i n gi n d u s t r y . I t e n a b l e s banks t o conduc t b u s i n e s s andp r o v i d e s e r v i c e s f o r t h e i r cus tomers i n j u r i s d i c t i o n swhere t h e banks have no p h y s i c a l p r e s e n c e . F orexample , a bank t h a t i s l i c e n s e d i n a f o r e i g n c o u n t r y

and ha s no o f f i c e i n t h e u n i t e d S t a t e s ma y want t op r o v i d e c e r t a i n s e r v i c e s i n t h e u n i t e d S t a t e s f o r i t sc u s t o m e r s i n o r d e r [ to] a t t r a c t o r r e t a i n t h e b u s i n e s so f i m p o r t a n t c l i e n t s w i t h u . S . b u s i n e s s a c t i v i t i e s .I n s t e a d o f b e a r i n g t h e c o s t s o f l i c e n s i n g , s t a f f i n g ando p e r a t i n g i t s own o f f i c e s i n t h e U n i t e d S t a t e s , t h ebank m i g h t open a c o r r e s p o n d e n t a c c o u n t w i t h ane x i s t i n g u . s . bank . By e s t a b l i s h i n g such ar e l a t i o n s h i p , t h e f o r e i g n bank , c a l l e d a r e s p o n d e n t ,and t h r o u g h i t , i t s c u s t o m e r s , c an r e c e i v e many o r a l lo f t h e s e r v i c e s o f f e r e d by t h e u . S . bank , c a l l e d t h ec o r r e s p o n d e n t .

Today, banks e s t a b l i s h m u l t i p l e c o r r e s p o n d e n tr e l a t i o n s h i p s t h r o u g h o u t t h e wor ld s o t h e y ma y engagei n i n t e r n a t i o n a l f i n a n c i a l t r a n s a c t i o n s f o r t h e m s e l v e sand t h e i r c l i e n t s i n p l a c e s where t h e y do n o t have ap h y s i c a l p r e s e n c e . Many o f t h e l a r g e s t i n t e r n a t i o n a lbanks l o c a t e d i n t h e m a j o r f i n a n c i a l c e n t e r s o f t h ewor ld s e r v e a s c o r r e s p o n d e n t s f o r t h o u s a n d s o f o t h e rbanks . Du e t o U.S. prominence i n i n t e r n a t i o n a l t r a d eand t h e h i g h demand f o r U.S. d o l l a r s due t o t h e i ro v e r a l l s t a b i l i t y , most f o r e i g n banks t h a t wish t op r o v i d e i n t e r n a t i o n a l s e r v i c e s t o t h e i r c u s t o m e r s havea c c o u n t s i n t h e U n i t e d S t a t e s c a p a b l e o f t r a n s a c t i n gb u s i n e s s i n u . s . d o l l a r s . Those t h a t l a c k a p h y s i c a lp r e s e n c e i n t h e u . s . w i l l do so t h r o u g h c o r r e s p o n d e n ta c c o u n t s , c r e a t i n g a l a r g e marke t f o r t h o s e s e r v i c e s .

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Cor responden t Banking: A Gateway F or Money Launder ing (Feb .

2001) .

19 . Because f o r e i g n f i n a n c i a l i n s t i t u t i o n s ma y n o t be

s u b j e c t t o o v e r s i g h t by U.S. r e g u l a t o r y a u t h o r i t i e s , p r o v i d i n g

t h e s e f o r e i g n f i n a n c i a l i n s t i t u t i o n s a c c e s s t o t h e U.S . f i n a n c i a l

sys tem t h r o u g h t h e c o r r e s p o n d e n t bank ing sys t em i n c r e a s e s t h e

r i s k o f money l a u n d e r i n g . I n o r d e r t o combat t h e s e r i s k s , among

o t h e r means, F e d e r a l F i n a n c i a l I n s t i t u t i o n s Examina t ion Counc i l

("FFIEC") p u b l i s h e s The Bank S e c r e c y Act /An t i -Money Launder ing

Handbook ( the "Handbook") , a p u b l i c a t i o n t h a t h e l p s i d e n t i f y

m o n e y - l a u n d e r i n g r i s k s an d e s t a b l i s h s g u i d e l i n e s f o r U.S .

f i n a n c i a l i n s t i t u t i o n s t o m i t i g a t e t h o s e r i s k s . I n t e r m s o f

c o r r e s p o n d e n t a c c o u n t s , t h e Handbook e x p l a i n s t h e i r i n h e r e n t

m o n e y - l a u n d e r i n g r i s k and how c r i m i n a l e l e m e n t s such as drug

t r a f f i c k e r s have u s e d them t o l a u n d e r f u n d s . The Handbook

f u r t h e r e x p l a i n s :

Because o f t h e l a r g e amount o f f u n d s , m u l t i p l et r a n s a c t i o n s , and t h e U.S. b a n k ' s p o t e n t i a l l a c k o ff a m i l i a r i t y w i t h t h e f o r e i g n c o r r e s p o n d e n t f i n a n c i a li n s t i t u t i o n ' s cus tomer, c r i m i n a l s and t e r r o r i s t s canmore e a s i l y c o n c e a l t h e s o u r c e and u s e o f i l l i c i tf u n d s . C o n s e q u e n t l y, each U.S. bank , i n c l u d i n g a l lo v e r s e a s b r a n c h e s , o f f i c e s , and s u b s i d i a r i e s , s h o u l dc l o s e l y m o n i t o r t r a n s a c t i o n s r e l a t e d t o f o r e i g nc o r r e s p o n d e n t a c c o u n t s .

Handbook, C o r r e s p o n d e n t Accoun t s (Fore ign) - Overview.

20 . The Handbook a l s o e x p l a i n s t h e d a n g e r o f " n e s t e d "

f o r e i g n c o r r e s p o n d e n t a c c o u n t s . "Nes ted a c c o u n t s o c c u r when a

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f o r e i g n f i n a n c i a l i n s t i t u t i o n g a i n s a c c e s s t o t h e U.S . f i n a n c i a l

sys t em by o p e r a t i n g t h r o u g h a U.S. c o r r e s p o n d e n t a c c o u n t

b e l o n g i n g t o a n o t h e r f o r e i g n f i n a n c i a l i n s t i t u t i o n . " These

n e s t e d a c c o u n t s pose a f u r t h e r money- l aunde r ing r i s k because t h e y

p r o v i d e a d d i t i o n a l f o r e i g n f i n a n c i a l i n s t i t u t i o n s a c c e s s t o t h e

u.s. f i n a n c i a l sys tem an d make i t more d i f f i c u l t t o i d e n t i f y t h e

s o u r c e and n a t u r e o f t h e funds b e i n g s e n t t o o r from a

c o r r e s p o n d e n t a c c o u n t a t a U.S. f i n a n c i a l sys t em.

21. Because o f t h e h e i g h t e n e d r i s k o f money l a u n d e r i n g

t h r o u g h c o r r e s p o n d e n t a c c o u n t s , t h e U.S.A. P a t r i o t A ct and

r e l a t e d r e g u l a t i o n s impose c e r t a i n o b l i g a t i o n s on U.S. f i n a n c i a l

i n s t i t u t i o n s h o u s i n g c o r r e s p o n d e n t a c c o u n t s f o r f o r e i g n f i n a n c i a l

i n s t i t u t i o n s t o g u a r d a g a i n s t money l a u n d e r i n g . As e x p l a i n e d i n

t h e Handbook:

Du e d i l i g e n c e p o l i c i e s , p r o c e d u r e s , and c o n t r o l s mus ti n c l u d e each o f t h e f o l l o w i n g :

o D e t e r m i n i n g w h e t h e r e a c h s u c h f o r e i g nc o r r e s p o n d e n t a c c o u n t i s s u b j e c t t o [Enhanced Du eD i l i g e n c e ] .

A s s e s s i n g t h e money l a u n d e r i n g r i s k s p r e s e n t e d bye a c h such f o r e i g n c o r r e s p o n d e n t a c c o u n t .

Apply ing r i s k - b a s e d p r o c e d u r e s and c o n t r o l s t oeach such f o r e i g n c o r r e s p o n d e n t a c c o u n t r e a s o n a b l yd e s i g n e d t o d e t e c t and r e p o r t known o r s u s p e c t e dmoney l a u n d e r i n g a c t i v i t y , i n c l u d i n g a p e r i o d i c

r ev iew o f t h e c o r r e s p o n d e n t a c c o u n t a c t i v i t ys u f f i c i e n t t o d e t e r m i n e c o n s i s t e n c y w i t hi n f o r m a t i o n o b t a i n e d a b o u t t h e t y p e , p u r p o s e , anda n t i c i p a t e d a c t i v i t y o f t h e a c c o u n t .

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Handbook, F o r e i g n C o r r e s p o n d e n t Account Recordkeep ing and Du e

D i l i g e n c e - Overview.

22 . Since a t l e a s t t h e l a t e 1990s , Wege l in has had a

c o r r e s p o n d e n t bank a c c o u n t w i t h UBS i n Stamford , C o n n e c t i c u t .

Through t h i s c o r r e s p o n d e n t r e l a t i o n s h i p , Wegel in c o u l d wire funds

from S w i t z e r l a n d t o t h e Stamford Cor responden t Account i n t h e

U n i t e d S t a t e s and, i n t u r n , w i r e funds from th e S t a m f o r d

C o r r e s p o n d e n t Account t o o t h e r a c c o u n t s i n t h e U n i t e d S t a t e s o r

t o a c c o u n t s o v e r s e a s . Wegel in a l s o had t h e a b i l i t y t o i s s u e

checks drawn on t h e Stamford Cor responden t Accoun t . These checks

f u n c t i o n e d l i k e any check drawn on an a c c o u n t a t a U . S . f i n a n c i a l

i n s t i t u t i o n and c o u l d be d e p o s i t e d , o r cashed f o r U . S . d o l l a r s ,

a t o t h e r f i n a n c i a l i n s t i t u t i o n s .

23. Wegel in a l s o o f f e r e d n e s t e d c o r r e s p o n d e n t s e r v i c e s

t o o t h e r Swiss banks , i n c l u d i n g Swiss Bank C and Swis s Bank D,

two Swiss banks t h a t a l s o h e l d u n d e c l a r e d a c c o u n t s f o r U . S .

t a x p a y e r s . These a d d i t i o n a l Swiss banks were a b l e t o have

Wege l in i s s u e checks d rawn on t h e Stamford C o r r e s p o n d e n t Account

on t h e i r b e h a l f . Swiss Bank C u s e d t h i s n e s t e d r e l a t i o n s h i p ,

d e s p i t e t h e f a c t t h a t Swiss Bank C m a i n t a i n e d i t s ow n

c o r r e s p o n d e n t a c c o u n t w i t h UBS i n t h e U n i t e d S t a t e s , which

a l l o w e d i t t o c o n d u c t w i r e t r a n s a c t i o n s i n t h e U n i t e d S t a t e s , b u t

d i d n o t i n c l u d e c h e c k - w r i t i n g a b i l i t i e s .

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Overview o f Wegel in and I t s C o - C o n s p i r a t o r s ' Mai land Wire Fraud Scheme t o Defraud t h e U ni t ed S t a t e s

24. From a t l e a s t i n o r about 2005 up t h rou g h and

i n c l u d i n g i n o r abou t 2011, more t han 100 U.S. t a x p a y e r - c l i e n t s

o f Wegel in and o t h e r Swiss banks , c o n s p i r e d wi th , a t v a r i o u s

t i m e s , Wegel in and many o f Weg l i n ' s employees , i n c l u d i n g

B e r l i n k a , F r e i , K e l l e r , Managing P a r t n e r A, E xecu t i v e A, C l i e n t

Advi s o r A, o t h e r C l i e n t A d v i s o r s a t Wegel in , Swiss Bank C and

Swiss Bank D, and o t h e r s known and unknown, t o d e f r a u d t h e Uni t ed

S t a t e s o f c e r t a i n t a x e s due and owed by concea l i ng from t h e IR S

undec l a r ed accoun t s owned by U.S. t axpaye r s a t Wegel in and o t h e r

Swiss Banks i n c l u d i n g Swiss Bank C and Swiss Bank D. As o f i n o r

a b o u t 2010, t h e t o t a l v a l u e o f such undec l a r ed acco un t s a t

Wegel in a lone wa s a t l e a s t $1 .2 b i l l i o n . I n p a r t i c u l a r , C l i e n t

A dvi so r s a t Wegel in , i n c l u d i n g B e r l i n k a , F r e i , and K e l l e r , and

o t h e r s opened dozens o f new undec l a r ed Wegel in acco un t s f o r U.S.

t a x p a y e r s i n o r abou t 2008 and 2009 a f t e r UBS and a n o t h e r l a r ~ e

i n t e r n a t i o n a l bank based i n Swi t ze r l and ("Swiss Bank B" ) c l o s e d

t h e i r b u s i n e s s e s s e r v i c i n g undec l a r ed acco u n t s f o r u . S . t axpaye r s

( " t h e U.S. c r o s s - b o r d e r banking b u s i n e s s e s " ) i n t h e wake o f

widespread news r e p o r t s i n S w i t z e r l a n d and t h e Uni ted S t a t e s t h a t

t h e U.S. Depar tment o f J u s t i c e wa s i n v e s t i g a t i n g UBS f o r h e l p i n g

U.S. t axpaye r s evade t a x e s and h ide a s s e t s i n Swiss bank

accoun t s . These C l i e n t A d v i s o r s d i d so a f t e r t h e Managing

P a r t n e r s , i n c l u d i n g Managing P a r t n e r A, a f f i r m a t i v e l y d ec i de d t o

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t a k e advan tage o f th e f l i g h t o f u . s . t a x p a y e r - c l i e n t s from UBS by

open ing ne w u n d e c l a r e d a c c o u n t s f o r t h e s e U.S. t a x p a y e r s a t

Wege l in . As a r e s u l t o f t h i s i n f l u x o f fo rmer UBS u . s .

t a x p a y e r - c l i e n t s i n t o Wegel inr Wege l in r s u n d e c l a r e d U.S. t a x p a y e r

a s s e t s u n d e r management r and t h e f e e s e a r n e d by managing t h o s e

a s s e t s r i n c r e a s e d s u b s t a n t i a l l y . As p a r t o f t h e i r s a l e s p i t c h t o

U.S . t a x p a y e r - c l i e n t s who were f l e e i n g UB S r a t v a r i o u s t imes r

c l i e n t a d v i s o r s a t Wege l in t o l d U.S. t a x p a y e r - c l i e n t s t h a t t h e i r

u n d e ~ l a r e da c c o u n t s a t Wegel in would n o t be d i s c l o s e d t o t h e

U n i t e d S t a t e s a u t h o r i t i e s b e c a u s e Wegel in had a l o n g t r a d i t i o n o f

bank s e c r e c y and r u n l i k e UB S r d i d n o t have o f f i c e s o u t s i d e

S w i t z e r l a n d r t h e r e b y making Wegel in l e s s v u l n e r a b l e t o Uni ted

S t a t e s law e n f o r c e m e n t p r e s s u r e . Managing P a r t n e r A and a n o t h e r

e x e c u t i v e o f Wegel in p a r t i c i p a t e d i n some o f t h e s e m e e t i n g s . At

v a r i o u s t i m e s r B e r l i n k a r F r e i r and K e l l e r c o l l e c t i v e l y managed

u n d e c l a r e d U.S. t a x p a y e r a s s e t s wor th hundreds o f m i l l i o n s o f

d o l l a r s . As p a r t o f t h e scheme t o d e f r a u d r Wegel inr Swiss Bank

C r and Swiss Bank D p r o v i d e d U.S. t a x p a y e r - c l i e n t s w i t h

u n d e c l a r e d a c c o u n t s a c c e s s t o funds i n t h e s e u n d e c l a r e d a c c o u n t s

i n a manner t h a t o b s c u r e d t h e s o u r c e o f t h e s e funds r t h a t iS r t h e

U.S. t a x p a y e r - c l i e n t s r u n d e c l a r e d a c c o u n t s i n S w i t z e r l a n d . Also

a s p a r t o f t h i s schemer t h e s e U.S. t a x p a y e r - c l i e n t s r used t h e

U.S . m a i l s r p r i v a t e and commercia l i n t e r s t a t e c a r r i e r s r and

i n t e r s t a t e w i r e communica t ions t o submi t t a x r e t u r n s t h a t were

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16/101

d . C l i e n t Adviso r s a t Wegel in p e r m i t t e d c e r t a i n

u . s . t a x p a y e r s t o open and m a i n t a i n u n d e c l a r e d a c c o u n t s a t

Wegel in u s i n g code names and numbers ( s o - c a l l e d "numbered

a c c o u n t s " ) s o t h a t t h e i d e n t i t i e s o f t h e U.S. t a x p a y e r - c l i e n t s

would a p p e a r on a minimal number o f bank documents i n t h e e v e n t

t h a t documents o r d a t a b a s e s were s t o l e n from Wegel in o r o t h e r w i s e

f e l l i n t o t h e hands o f t h i r d p a r t i e s .

e . C l i e n t A d v i s o r s a t Wegel in e n s u r e d t h a t

a c c o u n t s t a t e m e n t s and o t h e r m a i l f o r t h e i r U.S. t a x p a y e r - c l i e n t s

were n o t m a i l e d t o them i n t h e Uni ted S t a t e s .

f . C l i e n t Adviso r s a t Wegel in s e n t e - m a i l s and

F e d ~ r a lExpress packages t o p o t e n t i a l U.S. t a x p a y e r - c l i e n t s i n

t h e U n i t e d S t a t e s t o s o l i c i t ne w p r i v a t e bank ing and a s s e t

management b u s i n e s s .

g . At v a r i o u s t imes from i n o r a b o u t 2005 up

t h r o u g h and i n c l u d i n g i n o r a b o u t 2007, C l i e n t Advisors a t

Wege l in communicated b y e - m a i l a n d / o r t e l e p h o n e w i t h U.S.

t a x p a y e r - c l i e n t s who had u n d e c l a r e d a c c o u n t s a t Wege l in . C l i e n t

A d v i s o r s somet imes used t h e i r p e r s o n a l e - m a i l a c c o u n t s t o

communica te w i t h U . s . t a x p a y e r s t o r educe t h e r i s k o f d e t e c t i o n

by law enfo rcement a u t h o r i t i e s .

h. Wegel in opened u n d e c l a r e d a c c o u n t s f o r U.S.

t a x p a y e r s r e f e r r e d t o them by, and whose accoun t open ing

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pape rwork was comple t ed by, an i n v e s t m e n t a d v i s o r i n Manha t t an

and a l a w y e r i n Los Ange les , C a l i f o r n i a .

i . Beginn ing i n o r a b o u t l a t e 2008 o r e a r l y

2009, a f t e r Wege1in began t o open ne w u n d e c l a r e d a c c o u n t s f o r

u . s . t a x p a y e r s whose a c c o u n t s were b e i n g c l o s e d by UBS, Managing

P a r t n e r A i n s t r u c t e d Wege1in C l i e n t A d v i s o r s o f t h e Z u r i c h Branch

n o t t o communica te w i t h t h e i r u . s . t a x p a y e r - c l i e n t s by t e l e p h o n e

o r e - m a i l , and i n s t e a d t o c a u s e t h e i r u . s . t a x p a y e r - c l i e n t s t o

t r a v e l from t h e u n i t e d S t a t e s t o S w i t z e r l a n d t o c o n d u c t b u s i n e s s

r e l a t i n g t o t h e i r u n d e c l a r e d a c c o u n t s .

j . B e r 1 i n k a a d v i s e d u . s . t a x p a y e r - c l i e n t s n o t t o

v o l u n t a r i l y d i s c l o s e u n d e c l a r e d a c c o u n t s t o t h e IR S an d a s s u r e d

them t h a t t h e i r Wege1in a c c o u n t i n f o r m a t i o n would n o t be

d i s c l o s e d t o U n i t e d S t a t e s a u t h o r i t i e s .

k . Wege1in, Swiss Bank C, an d Swiss Bank D

p r o v i d e d u . S . t a x p a y e r - c l i e n t s w i t h u n d e c l a r e d a c c o u n t s a c c e s s

t o , and u s e o f , t h e funds i n t h e s e u n d e c l a r e d a c c o u n t s i n manner

t h a t h e l p e d u . S . t a x p a y e r - c l i e n t s keep t h e s e u n d e c l a r e d a c c o u n t s

c o n c e a l e d and c o n t i n u e t o a v o i d pay ing t a x e s due and owed from

t h e income g e n e r a t e d i n t h e s e a c c o u n t s .

1 . Va r i o u s u . S . t a x p a y e r - c l i e n t s o f Wege1in and

o t h e r Swiss banks , i n c l u d i n g Swiss Bank C and Swiss Bank D,

u t i l i z i n g t h e m a i l s and w i r e s , f i l e d Forms 1040 t h a t f a l s e l y and

f r a u d u l e n t l y f a i l e d t o r e p o r t t h e e x i s t e n c e o f , and t h e income

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g e n e r a t e d from, t h e i r u n d e c l a r e d Wege l in a c c o u n t s ; evaded

s u b s t a n t i a l income t a x e s due and owing t o t h e IRS, t h u s

d e f r a u d i n g t h e IR S o f t h e s e funds ; and f a i l e d t o f i l e FBARs

i d e n t i f y i n g t h e i r u n d e c l a r e d a c c o u n t s .

Wege l in S o l i c i t e d New U n d e c l a r e dAccoun t s Through a T h i r d - P a r t y Webs i t e

26. From i n o r a b o u t 2005 up t h r o u g h and i n c l u d i n g i n

o r a b o u t 2009, Wegel in s o l i c i t e d ne w b u s i n e s s from U.S. t a x p a y e r s

w i s h i n g t o open u n d e c l a r e d a c c o u n t s i n S w i t z e r l a n d by r e c r u i t i n g

c l i e n t s t h r o u g h t h e t h i r d - p a r t y w e b s i t e "SwissPr iva teBank .com."

As o f on o r a b o u t J u l y 2, 2007, t h i s w e b s i t e a d v e r t i s e d "Swiss

Numbered Bank A c c o u n t [ s ] " and "Swiss Anonymous Bank A c c o u n t [ s ] " ,

among o t h e r t h i n g s . S p e c i f i c a l l y , t h e w e b s i t e s t a t e d :

S w i s s b a n k i n g l aws a r e v e r y s t r i c t and i t i s i l l e g a lf o r a b a n k e r t o r e v e a l t h e p e r s o n a l d e t a i l s o f ana c c o u n t number u n l e s s o r d e r e d t o do so by a j u d g e .

T h i s i s l ong e s t a b l i s h e d i n Swiss l aw. Any b a n k e r who

r e v e a l s i n f o r m a t i o n a b o u t you w i t h o u t y o u r c o n s e n tr i s k s a c u s t o d i a l s e n t a n c e [ s i c ] i f c o n v i c t e d , w i t h t h eo n l y e x c e p t i o n s t o t h i s r u l e c o n c e r n i n g s e r i o u s v i o l e n tc r i m e s .

Swiss b a n k i n g s e c r e c y i s n o t l i f t e d f o r t a x e v a s i o n .The r e a s o n f o r t h i s i s b e c a u s e f a i l u r e t o r e p o r t incomeo r a s s e t s i s n o t c o n s i d e r e d a c r i m e u n d e r Swiss b a n k i n gl aw. As such , n e i t h e r t h e Swiss gove rnmen t , n o r anyo t h e r government , can o b t a i n i n f o r m a t i o n abou t yourbank a c c o u n t . They mus t f i r s t conv ince a Swiss j udget h a t you have commi t t ed a s e r i o u s c r ime p u n i s h a b l e byt h e S w i s s Pena l Code.

The w e b s i t e i n v i t e d u s e r s t o " [ r ] e q u e s t a Swiss b a n k i n g

c o n s u l t a t i o n t oday" by c l i c k i n g a l i n k t o a " C o n s u l t a t i o n

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Reques t" form t h a t asked f o r i n f o r m a t i o n abou t a u s e r ' s coun t ry

o f r e s i d e n c e , t e l ephone number, and e - m a i l addres s . Th e

t h i r d - p a r t y webs i t e o p e r a t o r prov ided t h i s i n fo rma t ion t o Wegel in

C l i e n t Advi so r s , who then s e n t e - m a i l s from Swi t ze r l and t o t h e

Uni t ed S t a t e s , among o t h e r p l a c e s , promot ing Wege l in ' s p r i v a t e

b ank ing and a s s e t management s e r v i c e s . In t h i s manner, Wegel in

C l i e n t Ad vi so r s c o l l e c t i v e l y s e n t more t han 100 such e - m a i l s t o

t h e Uni ted S t a t e s s o l i c i t i n g ne w b u s i n e s s . In c e r t a i n cases

where U . S . t axpaye r s responded t o s u c h e - m a i l s . C l i e n t Ad vi s o r s

s e n t by F e d e r a l Express ha rd cop ie s o f th e b a n k ' s promot iona l

m a t e r i a l s t o U . S . t axpaye r s i n t h e Uni ted S t a t e s . This proces s

e v e n t u a l l y r e s u l t e d i n Wegel in o b t a i n i n g ne w undec l a r ed accoun t s

ho ld ing m i l l i o n s o f d o l l a r s i n t o t a l f o r U . S . t a x p a y e r s .

Managing P a r t n e r A and o t h e r managing p a r t n e r s o f Wegel in

r e c e i v e d q u a r t e r l y upda t e s on the p r o g r e s s o f t h i s a d v e r t i s i n g

program. Managing P a r t n e r A approved a l l payments t o t h e webs i t e

o p e r a t o r .

27 . As a r e s u l t o f t h i s and o t h e r b u s i n e s s deve lopment

e f f o r t s , t h e t o t a l va lue o f undec l a r ed acco un t s h e l d by U . S .

t a x p a y e r s a t Wegel in i n c r e a s e d s u b s t a n t i a l l y ove r t ime . As o f i n

o r a b o u t 2005, Wegel in h i d app rox ima te ly $240 m i l l i o n i n

undec l a red a s s e t s f o r U.S . t a x p a y e r - c l i e n t s . By i n o r abou t

2010, t h i s amount ro se t o a t l e a s t $1 .2 b i l l i o n .

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Wegel in Opens New Undeclared AccountsFor U.S . Taxpayers F l e e i n g UBS

28. I n o r a b o u t May and June 2008, t h e U n i t e d S t a t e s

Governmen t ' s c r i m i n a l i n v e s t i g a t i o n o f UBS's U.S. c r o s s - b o r d e r

b a n k i n g b u s i n e s s became p u b l i c l y known and r e c e i v e d widespread

media coverage i n S w i t z e r l a n d and th e Uni ted S t a t e s . At o r abou t

t h a t t i m e , many U.S. t a x p a y e r s w i t h u n d e c l a r e d a c c o u n t s a t UBS

began t o u n d e r s t a n d t h a t t h e i n v e s t i g a t i o n migh t r e s u l t i n th e

d i s c l o s u r e o f t h e i r i d e n t i t i e s and UBS a c c o u n t i n f o r m a t i o n t o t h e

IRS.

29. On o r a b o u t J u l y 17, 2008, UBS announced t h a t i t

was c l o s i n g i t s U . S . c r o s s - b o r d e r bank ing b u s i n e s s . T h e r e a f t e r ,

UBS c l i e n t a d v i s o r s began t o n o t i f y t h e i r U.S. t a x p a y e r - c l i e n t s

t h a t UBS wa s c l o s i n g t h e i r u n d e c l a r e d a c c o u n t s . Some UBS c l i e n t

a d v i s o r s t o l d such c l i e n t s t h a t t h e y cou ld c o n t i n u e t o m a i n t a i n

u n d e c l a r e d a c c o u n t s a t Wegel in and c e r t a i n o t h e r Swiss p r i v a t e

b a n k s . At o r a b o u t t h a t t i m e , i t became wide ly known i n Swiss

p r i v a t e bank ing c i r c l e s t h a t Wegel in was open ing new u n d e c l a r e d

a c c o u n t s f o r U.S. t a x p a y e r s .

30. I n o r a b o u t 2008, t h e E x e c u t i v e Committee o f

Wege l in , th e d e f e n d a n t , i n c l u d i n g i t s Managing P a r t n e r s ,

a f f i r m a t i v e l y d e c i d e d t o t a k e advan tage o f t h e f l i g h t o f U.S.

t a x p a y e r s w i t h u n d e c l a r e d a c c o u n t s by open ing ne w u n d e c l a r e d

a c c o u n t s f o r many o f them a t Wegel in . T h e r e a f t e r , i n o r abou t

2008 and 2009, Wegel in opened new u n d e c l a r e d a c c o u n t s f o r a t

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l e a s t 70 U.S. t a x p a y e r s . Most o f t h e s e were opened a t We g e l i n ' s

Z u r i c h Branch.

31. I n o r a b o u t 2008, Managing P a r t n e r A announced

t h i s d e c i s i o n t o c e r t a i n p e r s o n n e l o f t h e Z u r i c h Branch . At o r

a b o u t t h e t ime o f t h i s announcement , a n o t h e r Wegel in e x e c u t i v e

( "Execu t ive A") s t a t e d t o p e r s o n n e l o f t h e Z u r i c h Branch t h a t

Wegel in was n o t exposed t o t h e r i s k o f p r o s e c u t i o n t h a t UBS f a c e d

b e c a u s e Wegel in was s m a l l e r t h a n UBS, and t h a t Wegel in c o u l d

c h a rg e h igh f e e s t o i t s ne w U.S. t a x p a y e r - c l i e n t s b e c a u s e t h e s e

c l i e n t s were a f r a i d o f p r o s e c u t i o n i n t h e U n i t e d S t a t e s .

32 . At o r a b o u t t h e t ime Managing P a r t n e r A announced

t h i s d e c i s i o n , Managing P a r t n e r A s u p e r v i s e d t h e c r e a t i o n o f a

l i s t o f C l i e n t A d v i s o r s a t t h e Zur ich Branch who were a v a i l a b l e

t o meet w i t h p o t e n t i a l U.S . t a x p a y e r - c l i e n t s who walked i n t o t h e

Z u r i c h Branch w i t h o u t an appo in tmen t s e e k i n g t o open ne w

u n d e c l a r e d a c c o u n t s . T h e r e a f t e r , i n o r a b o u t 2008 and 2009,

B e r l i n k a , F r e i , K e l l e r , and o t h e r C l i e n t A d v i s o r s met w i t h many

ne w p o t e n t i a l U.S. t a x p a y e r - c l i e n t s who a r r i v e d a t Wegel in . I n

t h e s e m e e t i n g s , Wegel in C l i e n t Adviso r s i n t e r v i e w e d t h e p o t e n t i a l

U.S. t a x p a y e r - c l i e n t s a b o u t t h e i r backgrounds , t h e s o u r c e s o f

t h e i r funds , and t h e amount o f money t h e y wished t o t r a n s f e r from

UBS t o Wegel in , among o t h e r t h i n g s . I n many c a s e s , Managing

P a r t n e r A o r E x e c u t i v e A j o i n e d t h e s e i n t e r v i e w s . Dur ing t h e s e

m e e t i n g s , t h e U.S. t a x p a y e r s t y p i c a l l y p r e s e n t e d t h e i r U.S.

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p a s s p o r t s f o r i n s p e c t i o n a n d / o r copy ing ; a d v i s e d t h a t t h e y were

u . s . c i t i z e n s o r l e g a l pe rmanen t r e s i d e n t s o f t h e U n i t e d S t a t e s ;

conf i rmed t h a t UBS was c l o s i n g t h e i r a c c o u n t s ; an d comple t ed

c e r t a i n a c c o u n t open ing documen ts . These documents t y p i c a l l y

i n c l u d e d a s t a n d a r d Swiss bank ing form c a l l e d "Form A," which

c l e a r l y i d e n t i f i e d t h e U.S. t a x p a y e r a s t h e b e n e f i c i a l owner o f

t h e a c c o u n t . I n some c a s e s , a s d e s c r i b e d i n more d e t a i l be low,

t h e C l i e n t A d v i s o r s s o u g h t t o r e a s s u r e t h e i r ne w U.S.

t a x p a y e r - c l i e n t s t h a t Wegel in would n o t d i s c l o s e t h e i r i d e n t i t i e s

o r a c c o u n t i n f o r m a t i o n t o t h e IRS.

33. I n p r e p a r a t i o n f o r t h e s e m e e t i n g s , Managing

P a r t n e r A and E x e c u t i v e A s u p e r v i s e d v i d e o t a p e d t r a i n i n g s e s s i o n s

w i t h C l i e n t A d v i s o r s o f We g e l i n ' s Z u r i c h Branch t o i n s t r u c t them

on t h e i r d e l i v e r y o f c e r t a i n s e l l i n g p o i n t s t o be made t o U.S .

t a x p a y e r s f l e e i n g UBS. These s e l l i n g p o i n t s i n c l u d e d t h e f a c t

t h a t Wege l in ha d no b r a n c h e s o u t s i d e S w i t z e r l a n d and was s m a l l ,

d i s c r e e t , and , u n l i k e UBS, n o t i n t h e media .

34 . I n t h i s manner, Wegel in opened ne w u n d e c l a r e d

a c c o u n t s f o r a t l e a s t 70 U.S. t a x p a y e r s . When such a c c o u n t s were

opened , t h e y were d e s i g n a t e d w i t h a s p e c i a l code t h a t i n d i c a t e d

t o p e r s o n n e l w i t h i n Wegel in , among o t h e r t h i n g s , t h a t t h e

a c c o u n t s were u n d e c l a r e d . At some p o i n t i n o r a b o u t 2008 o r

2009, t h e Z u r i c h Branch r e q u i r e d t h a t t h e open ing o f a l l ne w U.S.

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t a x p a y e r a c c o u n t s had t o be approved by Managing P a r t n e r A o r

E x e c u t i v e A.

35 . From i n o r a b o u t March 2009 up t h r o u g h and

i n c l u d i n g i n o r a b o u t O c t o b e r 2009, a p p r o x i m a t e l y 14 ,000 U.S.

t a x p a y e r s v o l u n t a r i l y d i s c l o s e d t o t h e IR S u n d e c l a r e d a c c o u n t s

h e l d a t banks a round t h e wor ld , i n c l u d i n g Wege l in . As p a r t o f

t h i s p r o c e s s , dozens o f U.S. t a x p a y e r s r e q u e s t e d from Wege l in

c o p i e s o f t h e i r a c c o u n t r e c o r d s so t h a t t h e y cou ld f u l l y d i s c l o s e

t h e i r a c c o u n t s t o t h e IRS. Wegel in compl i ed w i t h many o f t h e s e

r e q u e s t s . The r e c o r d s t h a t Wege l in s e n t t o t h e U n i t e d S t a t e s

i n c l u d e d t r a n s a c t i o n c o n f i r m a t i o n s and o t h e r documents l i s t i n g

t h e names o f many Wegel in C l i e n t A d v i s o r s , i n c l u d i n g B e r l i n k a ,

F r e i , and K e l l e r . I n r e sponse t o t h e e x p e c t e d d i s c l o s u r e o f t h e

names o f C l i e n t A d v i s o r s t o t h e IR S t h r o u g h t h e s e r e c o r d s , i n o r

a b o u t 2009, Managing P a r t n e r A announced t o c e r t a i n p e r s o n n e l

w i t h i n t h e Z u r i c h Branch t h a t t h e fo rma t o f c e r t a i n Wege l in

a c c o u n t - r e l a t e d documents would be changed so t h a t t h e name o f

th e C l i e n t A d v i s o r would no l o n g e r a p p e a r on t h e s e documen t s . On

a r o l l i n g b a s i s from i n o r a b o u t l a t e 2009 up t h rough and

i n c l u d i n g i n o r a b o u t e a r l y 2010, t h i s change was imp lemen ted

such t h a t t h e names o f t h e C l i e n t A d v i s o r s no l o n g e r appeared on

c e r t a i n r e c o r d s r e l a t i n g t o u n d e c l a r e d a c c o u n t s h e l d by U.S.

t a x p a y e r s , an d "Team I n t e r n a t i o n a l , " o r a s i m i l a r d e s i g n a t i o n ,

appeared i n s t e a d .

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36 . I n o r a b o u t mid-2009, Wegel in s t o p p e d open ing ne w

u n d e c l a r e d a c c o u n t s f o r U.S. t a x p a y e r s b u t d i d n o t , a t t h a t t ime ,

c l o s e i t s e x i s t i n g u n d e c l a r e d U.S. t a x p a y e r a c c o u n t s . I n o r

a b o u t August 2011, Wege l in s e n t l e t t e r s t ou . s .

t a x p a y e r - c l i e n t s

s t a t i n g t h a t i t had "dec ided t o no l o n g e r s e r v e US p e r s o n s "

e f f e c t i v e December 31, 2011.

37 . I n o r a b o u t t h e end o f 2009 o r t h e b e g i n n i n g o f

2010, a f t e r Wege l in s t o p p e d open ing new u n d e c l a r e d a c c o u n t s f o r

U.S. t a x p a y e r s , B e r l i n k a and E x e c u t i v e A opened a t l e a s t t h r e e

ne w u n d e c l a r e d a c c o u n t s f o r U.S. t a x p a y e r s . Each o f t h e s e U.S.

t a x p a y e r s h ad a t l e a s t tw o p a s s p o r t s one from t h e U n i t e d

S t a t e s and one from a second c o u n t r y and each h ad r e c e n t l y

f l e d from Swiss Bank A, a n o t h e r Swiss p r i v a t e bank . I n each

c a s e , B e r l i n k a and Execu t ive A opened t h e ne w u n d e c l a r e d a c c o u n t

u n d e r t h e p a s s p o r t o f t h e second c o u n t r y, even though B e r l i n k a

and E x e c u t i v e A were w e l l aware t h a t t h e U.S. t a x p a y e r had a U.S.

p a s s p o r t .

Overview o f Wege1in and The Consp i racy t o Launde r FundsThrough We g e l i n ' s Corresponden t Account t o Promote t h e

Mai l an d Wire Fraud Scheme t o Defraud t h e U n i t e d S t a t e s

38 . From a t l e a s t i n o r a b o u t 2005 up t h rough and

i n c l u d i n g i n o r a b o u t 2011, i n o r d e r t o promote t h e scheme t o

d e f r a u d d e s c r i b e d above , Wegel in , Swiss Bank C, Swiss Bank D, and

o t h e r s , known and unknown, used t h e Stamford Corresponden t

Accoun t t o p r o v i d e U.S. t a x p a y e r - c l i e n t s a c c e s s i n t h e U n i t e d

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S t a t e s t o t h e i r u n d e c l a r e d funds h e l d i n S w i t z e r l a n d . These

i n t e r n a t i o n a l t r a n s f e r s were o f t e n e x e c u t e d i n a manner t h a t

h e l p e d c o n c e a l o r o b s c u r e t h e u . S . t a x p a y e r - c l i e n t s ' r e l a t i o n s h i p

w i t h t h e t r a n s f e r r e d funds and h e l p e d t o p r e v e n t t h e d e t e c t i o n o ft h e u n d e c l a r e d a c c o u n t s . A d d i t i o n a l l y, t h e l a r g e volume o f

a d d i t i o n a l funds i n t h e Stamford Cor responden t Accoun t , which wa s

knowing ly commingled w i t h t h e l a u n d e r e d funds , and t h e h i g h

volume o f t r a n s a c t i o n s i n and o u t o f t h e Stamford C o r r e s p o n d e n t

Accoun t , f a c i l i t a t e d t h i s money l a u n d e r i n g by making t h e

t r a n s a c t i o n s i n v o l v i n g u n d e c l a r e d funds more d i f f i c u l t t o d e t e c t

and l e n d i n g them an a u r a o f l e g i t i m a c y. These i n t e r n a t i o n a l

t r a n s f e r s o f funds from u n d e c l a r e d a c c o u n t s i n S w i t z e r l a n d

i n v o l v i n g t h e Stamford Cor re sponden t Accoun t promoted t h e m a i l

and wire f r a u d scheme d e s c r i b e d above i n which Wegel in and o t h e r s

c o n s p i r e d w i t h u . S . t a x p a y e r - c l i e n t s t o d e f r a u d t h e U n i t e d S t a t e s

o f t h e t a x e s owed from t h e income g e n e r a t e d i n t h e u n d e c l a r e d

a c c o u n t s w h i l e a t t h e same t ime p r o v i d i n g t h e u . S . t a x p a y e r-

c l i e n t s a c c e s s t o , and u s e o f , t h e funds i n t h e i r u n d e c l a r e d

a c c o u n t s i n a manner t h a t would h e l p c o n c e a l t h e s o u r c e o f t h e i r

f u n d s , t h a t i s , t h e i r u n d e c l a r e d a c c o u n t s i n S w i t z e r l a n d .

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Means and Methods o f th e I n t e r n a t i o n a lMoney Launder ing Conspi racy

39 . Among t h e means and methods by which Wegel in and

i t s c o - c o n s p i r a t o r s c a r r i e d o u t t h e money l aunde r ing consp i r acy

were t h e fo l l owing :

a . Upon r e q u e s t by U.s . t a x p a y e r - c l i e n t s w i t h

undec l a r ed accounts a t Wegel in , $wiss Bank C, o r Swiss Bank D,

C l i e n t Advisors a t t h e s e banks o r i nd epen d en t Swiss a s s e t

managers would send v i a p r i v a t e i n t e r s t a t e commercia l c a r r i e r ,

such as DHL o r Fede ra l Express , checks from Swi t ze r l and drawn on

t h e Stamford Cor respondent Account t o U.S. t a x p a y e r - c l i e n t s i n

t h e Un i t ed S t a t e s .

b . As an a l t e r n a t i v e t o checks , funds from t h e

U.S. t a x p a y e r - c l i e n t s were d e b i t e d from t h e i r undec l a r ed accoun t s

i n Swi t ze r l and and wired t o them i n t h e u n i t e d S t a t e s th rough the

Stamford Cor respondent Account .

c . Ra the r t han one l a r g e check o r wi re f o r t h e

amount r e q u e s t e d , ba tches o f m u l t i p l e checks o r wire s i n s m a l l e r

amounts were o f t e n s e n t i n o r d e r t o minimize t h e r i s k o f s c r u t i n y

o r d e t e c t i o n of t h e t r a n s a c t i o n by U.S. f i n a n c i a l i n s t i t u t i o n s o r

government a u t h o r i t i e s and t h e d i scove ry o f t h e U.S. t axpaye r-

c l i e n t s ' undec l a r ed accoun t s .

d. Checks were somet imes made pay ab l e t o

c o r p o r a t e e n t i t i e s a f f i l i a t e d wi th t h e U.S. t a x p a y e r - c l i e n t o r

f ami ly members o f th e U.S. t axpaye r, r a t h e r t han t h e U.S.

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t a x p a y e r h i m s e l f o r h e r s e l f , h e l p i n g t o o b s c u r e t h e r e l a t i o n s h i p

be tween t h e U.S. t a x p a y e r - c l i e n t and t h e u n d e c l a r e d f u n d s .

e . When U.S. t a x p a y e r s w i t h u n d e c l a r e d a c c o u n t s

a t Swiss banks o t h e r t h a n Wegel in , i n c l u d i n g Swiss Bank C and

Swiss Bank D, made r e q u e s t s f o r funds , t h e y would r e c e i v e t h e i r

f u n d s , a s d e s c r i b e d above , t h r o u g h We g e l i n ' s Stamford

C o r r e s p o n d e n t Account .

f . While t h e checks and w i r e s s e n t t o U.S.

t a x p a y e r - c l i e n t s r e f e r e n c e d Wegel in , no r e f e r e n c e was made t o t h e

a c c o u n t names o r numbers o f t h e U.S. t a x p a y e r - c l i e n t s a t Wegel in

o r o t h e r Swiss banks , such a s Swiss Bank C and Swiss Bank D.

g. At t h e r e q u e s t o f U.S. t a x p a y e r - c l i e n t s t o

t h e i r C l i e n t A d v i s o r s o r Swiss a s s e t managers , funds were s e n t

from t h e Stamford Corresponden t Accoun t t o t h i r d p a r t i e s who

p r o v i d e d goods o r s e r v i c e s t o U.S. t a x p a y e r s , t h u s a l l o w i n g t h e

U.S . t a x p a y e r t h e b e n e f i t o f t h e s e u n d e c l a r e d funds i n a manner

d e s i g n e d t o make t h e s o u r c e o f th e funds , t h a t i s , a U.S .

t a x p a y e r - c l i e n t ' s u n d e c l a r e d Swiss a c c o u n t , d i f f i c u l t t o d e t e c t .

h . These i n t e r n a t i o n a l t r a n s f e r s o f u n d e c l a r e d

funds were c h a n n e l e d t h r o u g h t h e Stamford Corresponden t Account ,

t h e e x i s t e n c e o f which p r o v i d e d Wegel in a c c e s s t o t h e U.S .

f i n a n c i a l sys t em. The u n d e c l a r e d funds s e n t t h r o u g h t h e a c c o u n t

were knowing ly commingled w i t h t h e o t h e r funds p r e s e n t i n t h e

Stamford C o r r e s p o n d e n t Accoun t , h e l p i n g t o e s s e n t i a l l y c l o a k

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t h e s e t r a n s a c t i o n s , v e i l them i n a n a u r a o f l e g i t i m a c y, and

r e n d e r s c r u t i n y o f t h e s e t r a n s a c t i o n s f a r l e s s l i k e l y .

i . F or one U. S. t a x p a y e r - c l i e n t w i t h b o t h

d e c l a r e d and u n d e c l a r e d a c c o u n t s a t Wegel in , F r e i a s k e d t h e U.S.

t a x p a y e r - c l i e n t t o a l l o w F r e i t o w i r e t h i s u.s. t a x p a y e r - c l i e n t

funds from t h e c l i e n t ' s d e c l a r e d a c c o u n t a t Wegel in t o t h e U n i t e d

S t a t e s f o r t h e U.S . t a x p a y e r - c l i e n t t o withdraw a s c a s h . F r e i

t h e n t r a v e l e d t o t h e Uni ted S t a t e s , c o l l e c t e d t h e funds and

p r o v i d e d t h o s e funds t o a n o t h e r U.S. t a x p a y e r - c l i e n t . F r e i t h e n

c r e d i t e d t h e f i r s t U.S. t a x p a y e r - c l i e n t ' s u n d e c l a r e d Wegel in

a c c o u n t w i t h t h a t sum.

u.s. Taxpaye r s w i t h Undec la red Accoun t s a tWegel in Who Rece ived Launde red U n d e c l a r e d Funds

Through t h e Stamford C o r r e s p o n d e n t Accoun t

C l i e n t A

40 . At a l l t i m e s r e l e v a n t t o t h i s Compla in t , C l i e n t Al

l i v e d w i t h h e r husband i n Boca Raton, F l o r i d a , and became a

n a t u r a l i z e d c i t i z e n i n 2003. I n o r a b o u t 1987 , C l i e n t A became

t h e b e n e f i c i a l owner o f an u n d e c l a r e d a c c o u n t a t UBS and i t s

p r e d e c e s s o r bank ; a t v a r i o u s t i m e s h e r husband was a j o i n t owner

o f . t h e a c c o u n t . I n o r a b o u t J u l y 2008, C l i e n t A 's UBS c l i e n t

a d v i s o r , Gian G i s l e r , a d v i s e d C l i e n t A and h e r husband t h a t she

I A l l d e s i g n a t i o n s o f e n t i t i e s and i n d i v i d u a l s by number o rl e t t e r i n t h i s Compla in t , i . e . " C l i e n t A, II a r e c o n s i s t e n t w i t ht h e d e s i g n a t i o n s r e f e r r e d t o i n Uni ted S t a t e s v . B e r l i n k a , e ta l . , 12 Cr. 2 ( JSR) .

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must c l o s e h e r UBS a c c o u n t because she was American . G i s l e r

i n s t r u c t e d C l i e n t A and h e r husband n o t t o c a l l UBS from t h e

U n i t e d S t a t e s , and t o l d them t h a t he was l e a v i n g UBS. G i s l e r

i n v i t e d C l i e n t A t o move h e r a c c o u n t w i t h G i s l e r t o a n o t h e r bank,

b u t sh e d e c l i n e d . G i s l e r t h e n recommended Wegel in and n o t e d t h a t

i t wa s a r e l i a b l e ' bank t h a t h ad no o f f i c e s i n t h e U n i t e d S t a t e s .

41 . I n o r a b o u t September 2008, C l i e n t A and h e r

husband t r a v e l e d t o Z u r i c h t o c l o s e h e r UBS a c c o u n t . By t h a t

t i m e , G i s l e r had l e f t UBS and C l i e n t A had a ne w UBS c l i e n t

a d v i s o r . The ne w UBS c l i e n t a d v i s o r i n s t r u c t e d them n o t t o c a l l

from t h e U n i t e d S t a t e s , p r o m i s e d t h a t UBS would n o t g i v e t h e i r

i n f o r m a t i o n t o U.S . a u t h o r i t i e s , and e n d o r s e d Wegel in a s a bank

a t which t o h o l d t h e i r a c c o u n t .

42 . Dur ing t h e same t r i p t o Z u r i c h i n Sep tember 2008,

C l i e n t A and h e r husband walked t o Wegel in and met w i t h B e r l i n k a .

B e r l i n k a opened a ne w u n d e c l a r e d a c c o u n t b e n e f i c i a l l y owned by

C l i e n t A u s i n g t h e code name "N1641" on o r a b o u t September 19 ,

2008. At t h a t t i m e , Wegel in r e c e i v e d , and t h e r e a f t e r m a i n t a i n e d

i n i t s f i l e s , a Form A s i g n e d by C l i e n t A s t a t i n g t h a t C l i e n t A

was t h e b e n e f i c i a l owner o f t h e a c c o u n t . I n a d d i t i o n , Wegel in

r e c e i v e d and t h e r e a f t e r m a i n t a i n e d i n i t s f i l e s a n o t h e r form

s t a t i n g t h a t C l i e n t A was "a U.S. c i t i z e n " i was " t h e b e n e f i c i a l

owner o f a l l income fTom US s o u r c e s d e p o s i t e d i n t h e [ accoun t ] i n

a c c o r d a n c e w i t h US t a x lawi and "was n o t e n t i t l e d t o o r does n o t

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want t o c l a i m any r e l i e f s [ s ic ] from Uni t e d s t a t e s wi thho ld ing

Tax. If

43 . B e r l i n k a t o l d C l i e n t A and h e r husband t h a t t hey

would be s a f e a t Wegel in and t h a t B e r l i n k a had b e e n i n s t r u c t e d

no t t o d i s c l o s e t h e i r a ccou n t i n f o r m a t i o n t o Un i t ed S t a t e s

a u t h o r i t i e s . I n a d d i t i o n , B e r l i n k a i n s t r u c t e d C l i e n t A and h e r

husband n o t t o c a l l o r send f axe s t o Wegel in from t h e Uni t ed

S t a t e s and e x p l a i n e d t h a t Wegel in would n o t send mai l t o them i n

t h e Uni t e d S t a t e s .

44 . On mUl t ip l e occas ions i n o r a bou t 2008 and 2009,

C l i e n t A o r h e r husband c a l l e d B e r l i n k a from t h e Uni t ed S t a t e s t o

n o t i f y him t h a t t hey would be t r a v e l i n g t o Aruba. Once i n Aruba,

C l i e n t A o r h e r husband c a l l e d a n d / o r f a x e d B e r l i n k a t o r e q u e s t

t h a t he s end checks t o them i n t h e U n i t ed S t a t e s . I n r e sp o nse ,

B e r l i n k a s e n t checks drawn on t h e Stamford Correspondent Account

from S w i t z e r l a n d t o C l i e n t A i n Boca Raton , F l o r i d a by p r i v a t e

l e t t e r c a r r i e r . A l l t h e c h e c k s , which were p ayab l e t o C l i e n t A,

l a t e r c l e a r e d t h rough t h e Stamford C o r r e s p o n d e n t Account wi th

e q u i v a l e n t funds be ing d e b i t e d from C l i e n t A 's accou n t a t

Wegel in . I n a d d i t i o n , t h e checks were i s s u e d i n t h e amount o f

$8,500 t o h e l p avo id d e t e c t i o n o f t h e a ccoun t by t h e IRS. The

fo l l owing , cha r t s e t s f o r t h t h e check numbers f o r some o f t h e s e

c h e c k s , t h e approx imate d a t e t hey were i s s u e d and mai led , t h e

~ p p r o x i m a t ed a t e t h e y were n e g o t i a t e d , t h e i r amount , and t h e

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a p p r o x i m a t e amount o f o t h e r funds p r e s e n t i n t h e Stamford

C o r r e s p on den t Account on t h e d a t e s t h e checks were n e g o t i a t e d , 2

as t h e pre sence o f t h e s e a d d i t i o n a l funds he lped t o concea l t h e s e

t r a n s a c t i o n s and l end them an a u r a o f l e g i t i m a c y :Check No . Approximate Approximate Approximate Balance i n

Date o f Date of Amount Cor responden tI s s u e N e g o t i a t i o n Account

3416 11 /25 /2008 1 / 7 / 2 0 0 9 $8,500 $88 ,525 ,7203417 11 /25 /2008 12 /24 /2008 $8,500 $1 35 , 19 5 , 7 873418 11 /25 /2008 12 /11 /2008 $8,500 $46 ,947 ,5703468 1 / 5 / 2 0 0 9 1 / 3 0 / 2 0 0 9 $ 8 , 500 $ 20 9 , 111 ,1 713469 1 / 5 / 2 0 0 9 2 /12 /2009 $ 8 , 50 0 $14 3 , 75 6 ,9 243470 1 / 5 / 2 0 0 9 3 / 5 / 2 0 0 9 $8,500 $95 ,378 ,8473510 2 /26 /2009 3 / 1 0 / 2 0 0 9 $8,500 $1 24 ,99 5 , 398

1 2 /26 /2009 4 /21 /2009 $8,500 $65 ,612 ,8632 2 /26 /2009 4 / 6 / 2 0 0 9 $8,500 $82 ,572 ,902

3552 4 / 2 1 / 2 0 0 9 5 / 8 / 2 0 0 9 $8,500 $51 ,668 ,3193553 4 / 2 1 / 2 0 0 9 5 / 2 0 / 2 0 0 9 $8,500 $94 ,628 ,2673554 4 /21 /2009 6 /16 /2009 $8,500 $46 ,616 ,3793659 8 /25 /2009 10 /26 /2009 $8,500 $32 ,206 ,0213660 8 /25 /2009 3 / 4 / 2 0 1 0 $8,500 $66 ,725 ,205To t a l : $119,000

45. I n a d d i t i o n t o t h e above -desc r ibed checks , C l i e n t

A and h e r husband a l s o r e c e i v e d funds i n t h e form o f wire s from

t h e i r u n d e c l a r e d Wegel in ac c oun t t h rou g h t h e Stamford

Cor re spo nd en t Account , bo th i n t h e u n i t e d S t a t e s and Aruba. The

fo l l owing c h a r t s e t s f o r t h t h e approx imate d a t e o f t h e s e w i r e s ,

t h e i r a p p r o x i m a t e amount, t h e r e c i p i e n t ( i n c l u d i n g l o c a t i o n ) o f

t h e moneys wi red , and t h e a p p r o x i m a t e amount o f o t h e r funds

2 "Balance i n Correspondent Account , " as r e f l e c t e d i n a l lc h a r t s i n t h i s Ve r i f i e d Compla in t , means t h e ba l ance i n t h eS t a m f o r d C o r r e s p o n d e n t Account as r e f l e c t e d i n acco u n t s t a t e m e n t sf o r t h e Stamford Cor respondent Account . The t r a n s a c t i o n s f o r anyp a r t i c u l a r day i n t h e Stamford C o r r e s p o n d e n t Account a r e n o tr e f l e c t e d on t h e accoun t s t a t e m e n t s i n c h r o n o l o g i c a l o r d e r f o rt h e p a r t i c u l a r day. Rathe r ; t h e y a r e organ i zed by c r e d i t andd e b i t , and , g e n e r a l l y , by t h e s i z e o f a each t r a n s a c t i o n .

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p r e s e n t i n t h e Stamford C o r r e s p o n d e n t Account on t h e d a t e s o f

t h e s e w i r e s , a s t h e pre sence o f t h e s e a d d i t i o n a l funds he lped t o

concea l t h e n a t u r e o f t h e s e t r a n s a c t i o n s an d l end them an au ra o f

l e g i t i m a c y :

Approximate Approximate B e n e f i c i a r y Balance i nDate o f Wire Amount Correspondent

Account1 / 6 / 2 0 0 9 $11,000 C l i e n t ' s A Husband i n Aruba $19 ,981 ,2144 / 2 1 / 2 0 0 9 $ 2 0 , 0 0 0 C l i e n t A and Husband i n Aruba $65 ,530 ,4397 / 1 3 / 2 0 0 9 $ 2 4 , 0 0 0 C l i e n t ' s A Husband i n U.S . $ 16 3 ,0 47 ,91 47 / 2 0 / 2 0 0 9 $ 2 4 , 0 0 0 C l i e n t ' s A Husband i n Aruba $6 2 , 01 7 ,1 749 / 1 5 / 2 0 0 9 $ 2 0 , 0 0 0 C l i e n t ' s A Husband i n Aruba $44 ,597 ,9583 / 9 / 2 0 1 0 $100,000 C l i e n t A an d Husband i n U.S. $46 ,133 ,785Tota l : $199,000

46. Asof

on o r a b o u t October 8, 2008, C l i e n t A 's

u n d e c l a r e d Wegel in accou n t h e l d ap p r ox i m a te ly $ 2 ,33 2 , 860 .

Kenneth Hel l e r

47 . At a l l t imes r e l e v a n t t o t h i s Compla in t , Kenneth

H e l l e r wa s a Uni t ed S t a t e s c i t i z e n who main t a ined a r e s i d e n c e and

o f f i c e i n Manhat tan . I n o r a b ou t December 2005 and J anua r y 2006,

H e l l e r opened an undec l a r ed ac c oun t a tUBS

and fundedi t

wi thapp rox ima te ly $26 ,420 ,822 wi re d from t h e U ni t ed S t a t e s . H e l l e r

t h e n t r a n s f e r r e d app rox ima t e ly $1 9 m i l l i o n from UBS t o h i s

a cco u n t a t Wegel in .

48 . On o r abou t June 6, 2008, H e l l e r became concerned

abou t t h e Depar tment o f J u s t i c e ' s i n v e s t i g a t i o n i n t o UBS's

c r o s s - b o r d e r b u s i n e s s and f axe d a news a r t i c l e a b ou t t h e

i n v e s t i g a t i o n t o h i s UBS c l i e n t a d v i s o r ("UBS C l i e n t A d v i s o r A") .

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49. On o r a b o u t June 21, 2008, H e l l e r r e t a i n e d an

i n d epen de n t a s s e t manager based i n L i e c h t e n s t e i n ( " L i e c h t e n s t e i n

A s s e t Manager A") t o manage a new undec l a r ed acc oun t t h a t he

opened a t Wegel in , a t o r a bou t t h a t t i m e . Over t h e n e x t s e v e r a l

months , H e l l e r funded t h i s a c c oun t w i t h app ro x im a te ly $1 9 m i l l i o n

wired from UBS. I n o r d e r t o p r o t e c t H e l l e r , t h e acco u n t wa s

opened i n t h e name o f Nathelm Corpo ra t i on , I n c . , acco rd ing t o a

September 9, 2008 l e t t e r s e n t t o H e l l e r ' s t a x p r e p a r e r by an

a t t o r n e y work ing f o r H e l l e r ( " H e l l e r At to rney A") . T h i s l e t t e r

f u r t h e r s t a t e d :

A l l H e l l e r money was t r a n s f e r r e d d i r e c t l y from UBS t oWegel in . . The prob lem i s t h e US Governmenti n t e r f e r e n c e wi th Swiss Banks , i n [an] a t t e m p t t o s e i z eincome t a x evade r s . . The US Government g l a d l yp r e s s e d i t s case wi th Swiss Govt f o r bank d i s c l o s u r e o fUS c i t i z e n s , e t c . Th i s i s wh y KH l e f t UBS[.]

50. On v a r i o u s d a t e s i n 2008 and 2009, i n c l u d i n g on o r

a b o u t August 22, 2008, L i e c h t e n s t e i n A s s e t Manager A f a x e d t o

H e l l e r ' s o f f i c e i n Manhat tan a c coun t s t a t e m e n t s and o t h e r

documents r e l a t i n g t o h i s undec l a r ed acco un t a t Wegel in .

51. On v a r i o u s occas ions i n o r ab o u t 2008 and 2009, i n

r e sponse t o t e l ephone and fax r e q u e s t s t h a t H e l l e r made from

l o c a t i o n s i n Manhat tan and New J e r s e y t o t h e L i e c h t e n s t e i n Asse t

Manager who managed H e l l e r ' s ac c oun t a t Wegel in , t h e

L i e c h t e n s t e i n A s s e t Manager m a i l ed o r s e n t by c o u r i e r s e r v i c e

from L i e c h t e n s t e i n t o t h e U n i t ed S t a t e s checks drawn on Weg e l in ' s

C o r r e s p o n d e n t Account f o r t h e b e n e f i t of H e l l e r , h i s w i fe , and

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h i s a s s o c i a t e s . F or example , on o r a b o u t J u l y 8, 2009, H e l l e r

c aus ed Wegel in t o i s s u e from t h e Stamford C o r r e s p o n d e n t Account

app rox ima te ly 12 checks i n t h e amount of $2,500 made t o H e l l e r ' s

w i f e . The L i e c h t e n s t e i n A s s e t Manager t hen s e n t t h e s e checks t o

H e l l e r i n t h e Uni ted S t a t e s . The fo l l owing c h a r t s e t s f o r t h t h e

check numbers f o r some o f t h e s e c h e c k s , t h e approx imate d a t e t hey

were i s s u e d and mai l ed , t h e approx imate d a t e t hey were

n e g o t i a t e d , t h e payee on t h e checks , t h e i r amount , and t h e

approx imate amount o f o t h e r funds p r e s e n t i n t h e Stamford

C o r r e s p o n d e n t Account on t h e d a t e s t h e checks were n e g o t i a t e d

which were commingled w i t h t h e s e l aunde red funds , as t h e pre sence

o f t h e s e a d d i t i o n a l funds he lped t o c oncea l t h e s e t r a n s a c t i o n s

and l end them an au ra o f l e g i t i m a c y :

~ h e c k Approximate Approximate Payee Approximate Balance i n~ o . Date o f Date o f Amount Cor responden t

I s s u e N e g o t i a t i o nAccount

3571 6 /8 /2009 6 /15 /2009 H e l l e r A s s o c i a t e $10,000 $69 ,074 ,9513583 7 /8 /2009 8 /18 /2009 H e l l e r ' s Wife $2 ,5 00 $64 ,536 ,1273584 7 /8 /2009 11 /17 /2009 H e l l e r ' s Wife $2 ,5 00 $49 ,570 ,9873585 7 / 8 / 2 0 0 9 11 /10 /2009 H e l l e r ' s Wife $2 ,5 00 $ 104 ,11 2 , 7793586 7 / 8 / 2 0 0 9 9 / 9 / 2 0 0 9 H e l l e r ' s Wife $2 ,5 00 $51 ,658 ,9123587 7 / 8 / 2 0 0 9 8 /31 /2009 H e l l e r ' s Wife $2,500 $ 29 4 ,4 5 1 , 6423588 7 / 8 / 2 0 0 9 1 0 / 6 / 2 0 0 9 H e l l e r ' s Wife $2,500 $53 ,827 ,6643589 7 / 8 / 2 0 0 9 9 / 2 2 / 2 0 0 9 H e l l e r ' s Wife $2,500 $59 ,943 ,0053590 7 /8 /2009 9 /29 /0209 H e l l e r ' s Wife $2,500 $34 ,520 ,3423591 7 / 8 / 2 0 0 9 1 0 / 1 3 / 2 0 0 9 H e l l e r ' s Wife $ 2 ,5 00 $ 81 ,37 5 , 4 733592 7 / 8 / 2 0 0 9 8 /10 /2009 H e l l e r ' s Wife $2,500 $ 37 ,43 1 , 7 903593 7 / 8 / 2 0 0 9 10 /20 /2009 H e l l e r ' s Wife $2,500 $ 54 ,84 0 , 1 873595 7 / 8 / 2 0 0 9 10 /27 /2009 H e l l e r ' s Wife $ 2 ,5 00 $88 ,762 ,9313623 7 / 1 6 / 2 0 0 9 1 0 / 5 / 2 0 0 9 H e l l e r $ 2 ,5 00 $81 ,812 ,8623736 9 /11 /2009 9 /18 /2009 H e l l e r A s s o c i a t e $37,814 $90 ,691 ,285

3744 9 /22 /2009 12 /23 /2009 H e l l e r $ 50 , 00 0 $36 ,532 ,1603745 9 /22 /2009 1 2 / 7 / 2 0 0 9 H e l l e r $ 50 , 00 0 $ 50 ,0 55 ,4 2 83746 9 / 2 2 / 2 0 0 9 11 / 3 / 2 0 0 9 H e l l e r $50,000 $ 44 ,69 3 , 4 283747 9 / 2 2 / 2 0 0 9 1 0 / 7 / 2 0 0 9 H e l l e r $25,000 $46 ,505 ,4913750 9 /24 /2009 1 0 / 5 / 2 0 0 9 H e l l e r $ 16 , 00 0 $ 81 ,7 67 ,1 2 2

i I 'otal : $271,314

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52 . On o r a b o u t December 31, 2008, H e l l e r ' s u n d e c l a r e d

a c c o u n t a t Wegel in h e l d ap p r ox i ma t e ly $ 1 8 , 4 6 6 , 6 8 6 .

53 . On o r a b o u t May 4, 2011, Kenneth H e l l e r was

i n d i c t e d i n t h e S o u t h e r n D i s t r i c t o f New York on c h a rg e s r e l a t e d

t o t h i s c o n d u c t . See U n i t e d S t a t e s v . H e l l e r , I n d i c t m e n t S I l O

C r. 388 (PKC). On June 27, 2011, H e l l e r p l e a d e d g u i l t y t o

c e r t a i n c ha rges r e l a t e d t o t h i s c o n d u c t .

C l i e n t EE

54 . At a l l t i m e s r e l e v a n t t o t h i s Compla in t , C l i e n t EE

was a r e s i d e n t o f New J e r s e y and a c i t i z e n o f t h e Uni t e d S t a t e s .

B e g i n n i n g i n o r a b o u t t h e 1980s , C l i e n t EE m a i n t a i n e d a n i n t e r e s t

i n a s s e t s h e l d i n an u n d e c l a r e d a c c o u n t w i t h Swiss Bank B i n

S w i t z e r l a n d .

55. I n o r a r o u n d 2008, C l i e n t EE opened a n u n d e c l a r e d

a c c o u n t a t Wegel in and funded i t by t r a n s f e r r i n g h i s u n d e c l a r e d

funds f rom h i s a c c o u n t a t Swiss Bank B i n t o h i s a c c o u n t a t

Wegel in . The a s s e t s i n h i s Wegel in a c c o u n t were managed by a n

i n d e p e n d e n t a s s e t manager i n S w i t z e r l a n d ( " I n d e p e n d e n t A s s e t

Manager A " ) .

56 . I n o r a r o u n d 2010, C l i e n t EE went on s a f a r i i n

A f r i c a . To p a y f o r t h e s a f a r i , by a p r e a r r a n g e d sys tem w i t h

I n d e p e n d e n t A s s e t Manager A, C l i e n t EE s e n t a l e t t e r w i t h no

r e t u r n a d d r e s s from New J e r s e y t o I n d e p e n d e n t A s s e t Manager A i n

S w i t z e r l a n d . The e n v e l o p e c o n t a i n e d a s i n g l e p i e c e o f p a p e r on

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which was w r i t t e n t h e amount o f money C l i e n t EE needed t o w i re t o

t h e s a f a r i company - - and no th ing e l s e . At o r abou t t h a t same

t ime , C l i e n t EE s e n t a second l e t t e r t o I n d e p e n d e n t A s s e t Manager

A c o n t a i n i n g on ly t h e w i re t r a n s f e r d e t a i l s f o r t h e s a f a r i

company 's bank a c c o u n t i n Botswana. T h e r e a f t e r , p u r s u a n t t o

t h e s e i n s t r u c t i o n s , on o r a bou t June 22, 2010, Wegel in wi r e d

app rox ima t e ly $37,000 t h ro ugh t h e Stamford C o r r e s p o n d e n t Account

t o t h e s a f a r i company 's bank accou n t i n Botswana.

57. A f t e r t h e t r a n s a c t i o n wa s c o m p l e t e , I n d e p e n d e n t

A s s e t Manager A s e n t C l i e n t EE t h e fo l l owing e ma i l , wi th t h e

s u b j e c t o f " a l l done" ;

Dear Fr i end

Your 2 l e t t e r s w e l l r e c e i v e d . Ev e ry th ing h a s been donea t [ s i c ] y o u r s a t i s f a c t i o n .

Hope t o g e t soon y o u r r e p o r t abou t y o u r expe r i ence i nA f r i c a .

k ind rgds [ Independent A s se t Manager A.]

58. I n August 2010, C l i e n t EE, who wa s i n A f r i c a on

h i s s a f a r i , c o n t a c t e d I n d e p e n d e n t A s s e t Manager A v i a s a t e l l i t e

phone t o r e q u e s t a d d i t i o n a l t r a n s f e r s o f funds from h i s

undec l a r ed accoun t f o r s a f a r i - r e l a t e d exp e nse s . These a d d i t i o n a l

t r a n s f e r s were c o n d u c t e d t h r o u g h t h e Stamford C o r r e s p o n d e n t

Account .

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59. The fo l l owing c h a r t s e t s f o r t h t h e approx imate

d a t e o f t h e t h r e e w i r e s i n v o l v i n g C l i e n t EE's undec l a r ed funds ,

t h e i r approx imate amount, t h e r e c i p i e n t o f t h e moneys wired , and

t h e approx imate amount o f o t h e r funds p r e s e n t i n t h e Stamford

C o r r e s p o n d e n t Account on t h e d a t e s o f t h e s e wi r e s which were

commingled w i t h t h e s e l a und e re d funds , as t h e pre sence o f t h e s e

a d d i t i o n a l funds he lped t o c o n c e a l t h e n a t u r e o f t h e s e

t r a n s a c t i o n s and l end them an a u r a o f l e g i t i m a c y :

Approximate Date Approximate B e n e f i c i a r y Balance i no f Wire Amount Cor responden t Account6 /22 /2010 $37,000 S a f a r i Company A $43 ,521 ,7428 /13 /2010 $7,358 S a f a r i Company A $ 4 4 , 78 4 ,1138 /18 /2010 $ 1 8 , 9 1 0 S a f a r i Company B $30 ,447 ,097To t a l : $ 6 3 , 2 6 8

60. As o f December 2009, C l i e n t EE's undec l a r ed

Wegel in a ccoun t h e l d app ro x im a te ly $847 ,844 .

C l i e n t FF

61. At a l l t im e s r e l e v a n t t o t h i s Compla in t , C l i e n t FF

was a r e s i d e n t o f C o n n e c t i c u t and a c i t i z e n o f t h e Uni ted S t a t e s .

Beginn ing i n o r abou t 2006, C l i e n t FF i n h e r i t e d t h e a s s e t s i n an

undec l a r ed accoun t a t Wegel in .

62. Between i n o r abo u t 2007 and i n o r abo u t 2010,

C l i e n t FF would r e q u e s t t h a t funds i n h e r undec l a r ed a c cou n t be

s e n t t o h e r i n t h e Uni t ed S t a t e s . Th e fo l l owing c h a r t s e t s f o r t h

t h e approx imate d a t e o f t h e s e wi re s of undec l a r ed funds , t h e i r

approx imate amount ( a l l be ing u n d e r $10 , 0 00 ) , and t h e approx imate

amount o f o t h e r funds p r e s e n t i n t h e Stamford C o r r e s p o n d e n t

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Account on t h e d a t e s of t h e s e wi r e s which were commingled wi th

t h e s e l aunde red funds , as t h e p re sen c e o f t h e s e a d d i t i o n a l funds

he lped t o c o n c e a l t h e n a t u r e of t h e s e t r a n s a c t i o n s and l end them

an a u r a o f l e g i t i m a c y :

Approximate Date Approximate Balance i n Corresponden to f Wire Amount Account3 / 3 0 / 2 0 0 7 $ 8 , 0 0 0 Unknown4 / 2 7 / 2 0 0 7 $ 8 , 0 0 0 Unknown4 / 1 / 2 0 0 8 $ 2 , 0 0 0 $ 2 48 ,6 54 , 35 84 / 1 5 / 2 0 0 8 $ 4 , 0 0 0 $ 133 ,3 43 , 68 45 / 1 / 2 0 0 8 $ 2 , 0 0 0 $ 86 , 74 0 , 8 535 / 1 5 / 2 0 0 8 $ 4 , 0 0 0 $ 332 ,2 92 , 78 75 / 3 0 / 2 0 0 8 $ 2 , 0 0 0 $ 36 2 ,1 38 ,50 06 /13 /2008 $ 4 , 0 0 0 $ 11 4 , 679 ,2 237 / 1 / 2 0 0 8 $ 2 , 0 0 0 $ 12 9 ,2 36 ,66 97 /15 /2008 $ 4 , 0 0 0 $ 13 2 ,8 74 ,86 3

8 / 1 / 2 0 0 8 $ 2 , 0 0 0 $ 92 ,4 3 5 , 80 58 / 1 5 / 2 0 0 8 $ 4 , 0 0 0 $ 72 ,9 0 7 , 70 28 / 2 9 / 2 0 0 8 $ 2 , 0 0 0 $ 20 5 , 8 41 ,6 4 29 /15 /2008 $ 4 , 0 0 0 $ 13 6 , 9 48 ,0 3 11 0 / 1 / 2 0 0 8 $ 2 , 0 0 0 $12 4 , 263 ,0 211 0 / 3 1 / 2 0 0 8 $ 2 , 0 0 0 $19 5 , 615 ,8 891 1 / 1 4 / 2 0 0 8 $ 4 , 0 0 0 $79 ,4 12 , 82 61 2 / 1 / 2 0 0 8 $ 2 , 0 0 0 $6 5 ,0 54 ,46 412 /15 /2008 $ 4 , 0 0 0 $9 3 ,5 34 ,73 91 2 / 3 1 / 2 0 0 8 $ 2 , 0 0 0 $8 4 ,8 33 ,90 51 / 1 5 / 2 0 0 9 $ 4 , 0 0 0 $1 2 9 , 33 6 ,1131 / 3 0 / 2 0 0 9 $ 2 , 0 0 0 $2 09 , 17 1 , 8 052 / 1 3 / 2 0 0 9 $ 4 , 0 0 0 $9 9 ,4 65 ,5 0 92 / 2 7 / 2 0 0 9 $ 2 , 0 0 0 $2 30 , 11 3 , 99 93 / 1 3 / 2 0 0 9 $ 4 , 0 0 0 $2 9 , 469 ,8 614 / 1 / 2 0 0 9 $ 2 , 0 0 0 $9 6 , 886 ,4 364 / 1 5 / 2 0 0 9 $ 4 , 0 0 0 $7 4 , 499 ,6 935 / 1 / 2 0 0 9 $ 2 , 0 0 0 $9 1 , 489 ,4 225 / 1 5 / 2 0 0 9 $ 4 , 0 0 0 $2 6 , 532 ,9 945 / 2 2 / 2 0 0 9 $ 4 , 0 0 0 $5 7 , 508 ,1 326 / 1 / 2 0 0 9 $ 2 , 0 0 0 $3 2 , 490 ,5 976 / 1 1 / 2 0 0 9 $ 6 , 0 0 0 $49,389 ,6 '436 / 1 5 / 2 0 1 1 $ 4 , 6 6 5 $ 6 9 , 15 6 ,0 837 / 1 / 2 0 0 9 $ 3 , 5 0 0 $ 80 , 56 5 , 0947 / 1 5 / 2 0 0 9 $ 4 , 6 6 5 $ 4 8 , 30 3 ,2 957 / 3 1 / 2 0 0 9 $ 3 , 5 0 0 $ 73 , 39 9 , 0878 / 1 4 / 2 0 0 9 $ 4 , 6 6 5 $ 96 , 61 8 , 7409 / 1 / 2 0 0 9 ~ 3 , 5 0 0 $ 46 , 29 1 , 1629 / 1 5 / 2 0 0 9 $ 4 , 6 6 5 $ 44 ,75 8 , 57 4

1 0 / 1 / 2 0 0 9 $ 3 , 5 0 0 $ 47 ,70 1 , 58 01 0 / 1 5 / 2 0 0 9 $ 4 , 6 6 5 $ 41 ,6 5 7 , 63 31 0 / 3 0 / 2 0 0 9 $ 3 , 5 0 0 $ 12 8 ,0 10 ,6 0 51 1 / 1 3 / 2 0 0 9 $ 4 , 6 6 5 $ 82 ,4 7 7 , 83 11 2 / 1 / 2 0 0 9 $ 3 , 5 0 0 $ 72 ,4 3 6 , 93 71 2 / 1 5 / 2 0 0 9 $ 4 , 6 6 5 $ 11 5 , 58 2 ,8 341 / 4 / 2 0 1 0 $ 3 , 5 0 0 $25 ,1 28 , 40 1

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Approximate Date Approximate B a l a n c e i n Corresponden to f Wire Amount Account1 / 1 5 / 2 0 1 0 $4/665 $5 6 / 85 6 / 9 722 / 1 / 2 0 1 0 $ 3 / 5 0 0 $124/432/2532 /12 /2010 $ 4 / 6 6 5 $ 6 2 / 44 9 / 4083 / 1 / 2 0 1 0 $ 3 / 5 0 0 $ 54 /56 8 / 04 03 /15 /2010 $ 4 / 6 6 5 $ 2 6 / 63 4 / 9414 / 1 / 2 0 1 0 $ 3 / 5 0 0 $ 48 /97 0 / 6114 /15 /2010 $ 4 / 6 6 5 $ 53 /29 6 / 70 24 /30 /2010 $3/500 $102/453/9645 /14 /2010 $4/665 $ 56 /66 6 / 63 56 /1 /2010 $3/500 $ 89 /3 4 3 / 92 46 /15 /2010 $4/665 $48/922/7137 /1 /2010 $3/500 $ 61 /8 9 1 / 87 97 /15 /2010 $4/665 $ 54 /3 9 3 / 35 77 /30 /2010 $3/500 $ 84 /6 28 /82 98 /13 /2010 $4/665 $ 44 /8 45 /71 99 /1 /2010 $3/500 $ 41 /4 16 /16 69 /15 /2010 $4/665 $118/095/50610 /1 /2010 $3/500 $96 /4 23 /5 0 110 /15 /2010 $4/665 $41 /5 46 /2 9 711 / 1 / 2 0 1 0 $ 3 / 5 0 0 $38/089/673

11 / 1 5 / 2 0 1 0 $4/665 $81 /3 27 /0 2 61 2 / 1 / 2 0 1 0 $ 3 / 5 0 0 $2 2 /6 29 /7 3912 /15 /2010 $ 4 / 6 6 5 $8 4 /6 05 /4 721 / 3 / 2 0 1 1 $3/500 $11 / 036 /1 551 / 1 4 / 2 0 1 1 $ 4 / 6 6 5 $121/848/9332 / 1 / 2 0 1 1 $3/500 $3 9 /2 12 /6 632 /15 /2011 $ 4 / 6 6 5 $4 7 / 8 73 /5 453 / 1 / 2 0 1 1 $3/500 $4 8 / 8 55 /2 623 / 1 5 / 2 0 11 $4/665 $3 5 / 658 /1144 / 1 / 2 0 1 1 $3/500 $5 9 / 1 51 /4 324 /15 /2011 $4/665 $32/234/8434 / 2 9 / 2 0 11 $3/500 $7 0 / 530 /9 465 / 1 3 / 2 0 11 $ 4 / 6 6 5 $148/092/1856 / 1 / 2 0 11 $3/500 $47/365/3446 /15 /2011 $ 4 / 6 6 5 $2 7 / 63 0 / 2767 / 1 / 2 0 11 $ 3 / 5 0 0 $5 6 / 19 8 / 8687 /15 /2011 $ 4 / 6 6 5 $ 3 9 / 911 / 74 38 / 1 / 2 0 11 $ 3 / 5 0 0 $ 2 0 / 25 9 / 34 08 /15 /2011 $ 4 / 6 6 5 $ 4 1 / 53 4 / 14 9To t a l : $324,955

63. As o f December 31, 2008, C l i e n t F F ' s undec l a r ed

Wegel in a ccoun t h e l d app r ox i m a te ly $637 ,395 .

C l i e n t GG

64. At a l l t imes r e l e v a n t t o t h i s Compla in t , C l i e n t GG

was a r e s i d e n t o f Wes tches t e r County, New York, and a c i t i z e n o f

t h e U n i t e d S t a t e s .

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65. Beginn ing i n o r a b o u t t h e e a r l y 1990s , C l i e n t GG

main t a ined an undec l a r ed acco u n t a t a Swiss bank. I n o r around

2006, C l i e n t GG t r a n s f e r r e d h i s a s s e t s a t t h i s Swiss bank i n t o an

undec l a r ed accoun t a t Wegel in . The a c coun t was h e l d i n the .name

o f B i r k d a l e U n i v e r s a l , S.A. ( " B i r k d a l e " ) , an e n t i t y e s t a b l i s h e d

unde r t h e laws o f Panama ( t he "B i rkda l e Account" ) . C l i e n t GG

a l s o main t a ined d e c l a r e d a ccou n t s a t Wegel in i n a d d i t i o n t o t h e

undec l a r ed B i r k d a l e Account . F r e i became C l i e n t GG's c l i e n t

a d v i s o r a t Wegel in . F r e i e x p l a i n e d t o C l i e n t GG t h a t th e purpose

o f p l a c i n g h i s a s s e t s i n t h e name o f B i r k d a l e was t o f u r t h e r

concea l h i s ownersh ip o f t h e funds .

66. I n o r abou t August 2007, F r e i u s e d one o f C l i e n t

GG's d e c l a r e d accoun t s a t Wegel in and t h e Stamford Correspondent

Account t o concea l F r e i ' s hand d e l i v e r y o f ap p r ox i ma t e ly $16,000

i n U.S. cu r r ency t o a n o t h e r U.S. t a x p a y e r - c l i e n t o f F r e i ( " F r e i ' s

O t h e r C l i e n t " ) i n t h e So u th e rn D i s t r i c t o f New York.

S p e c i f i c a l l y , p r i o r t o a t r i p t o t h e Un i t e d S t a t e s i n o r a bo u t

Augus t 2007, F r e i a s k e d C l i e n t GG t o pe rmi t F r e i t o wi re

a p p r o x i m a t e ly $16,000 from one o f C l i e n t GG's d e c l a r e d Wegel in

a ccoun t s t o C l i e n t GG i n t h e Sou the rn D i s t r i c t o f New York and

t h e n have C l i e n t GG withdraw t h e s e funds from h i s U.S . bank as

cash f o r F r e i t o g ive t o F r e i ' s o t h e r C l i e n t . C l i e n t GG

consen t ed . F r e i t hen wi r ed t h e s e funds t h rou g h t h e Stamford

C o r r e s p o n d e n t Account i n two t r a n s a c t i o n s , e a c h unde r $10 ,000 ,

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r educ ing t h e chances t h a t t h e t r a n s f e r would be s c r u t i n i z e d . Th e

c h a r t below s e t s o u t t h e t r a n s a c t i o n s as w e l l a s t h e approx imate

amount o f o t h e r funds p r e s e n t i n t h e Stamford Cor respondent

Account on t h e d a t e s o f t h e w i r e s which were commingled wi th

t h e s e l aunde red funds , as t h e pre sence o f t h e s e a d d i t i o n a l funds

he lped t o concea l t h e n a t u r e o f t h e s e t r a n s a c t i o n s and l end them

an a u r a o f l e g i t i m a c y :

Approximate Date Approximate Balance i n Cor responden to f Wire Amount Account8 / 8 / 2 0 0 7 $8,000 Unknown8 / 9 / 2 0 0 7 $8,000 UnknownTo t a l s : $16,000

67. C l i e n t GG, wh o was aware o f c e r t a i n cu r r ency

t r a n s a c t i o n r e p o r t i n g r e q u i r e m e n t s o f U.S. f i n a n c i a l

i n s t i t u t i o n s , withdrew t h e s e funds from h i s bank i n Wes tch es t e r

County, New York i n t h r e e d i f f e r e n t w i t hd rawa l s on t h r e e

d i f f e r e n t d a t e s , each i n a n amount l e s s t h a n $10 ,000 . F r e i t hen

t r a v e l e d t o t h e Uni t ed S t a t e s where , on o r abou t August 21, 2007,

he met C l i e n t GG f o r lunch i n Manhat tan . At t h e l un c h , C l i e n t GG

prov ided F r e i an unmarked enve lope c o n t a i n i n g t h e a pp rox im a te ly

$16,000 i n cash . Dur ing t h e l un c h , t h e h e a d w a i t e r in formed F r e i

t h a t someone e l s e a t t h e r e s t a u r a n t wished t o s p e a k wi th him.

F r e i t hen e x c u s e d h imse l f from C l i e n t GG f o r ap p r ox i ma t e ly t e n

minu te s . F r e i s a t a t a t a b l e a c r o s s t h e r e s t a u r a n t wi th

F r e i ' s o t h e r C l i e n t and prov ided h e r w i t h t h e c a s h - f i l l e d

e n v e l o p e t h a t C l i e n t GG prov ided t o F r e i . F r e i commented t o

C l i e n t GG t h a t i t was becoming i n c r e a s i n g l y d i f f i c u l t t o move

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funds o u t o f Swi t ze r l and and t h i s was a t e chn ique he employed t o

conduc t s u c h i n t e r n a t i o n a l t r a n s a c t i o n s .

68. F r e i t hen c r e d i t e d C l i e n t G 8 ' s undec l a r ed a c c oun t

a t Wegel in , t h e Bi rkda l e Account , wi th app rox ima te ly $16 ,000 .69. As o f 2010, C l i e n t 8 8 ' s undec l a r ed Wegel in a c coun t

h e l d app rox ima te ly $898 ,652 .

C l i e n t HH

70. At a l l t imes r e l e v a n t t o t h i s Complaint , C l i e n t HH

wa s a r e s i d e n t o f Connec t i cu t and, beg inn ing i n 2007, became a

c i t i z e n o f t h e Uni ted s t a t e s .

71. Beginn ing i n

filed - wegelin complaint with exhibits

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